10 ms·

I would argue Visa and Mastercard and payment processing at large as the top priority by far. It's crazy that we've given up control as a society of the only m

by tempsy 6y ago

I would argue Visa and Mastercard and payment processing at large as the top priority by far. It's crazy that we've given up control as a society of the only mechanisms for electronic payments in an increasingly cashless world to unregulated private entities who continue to jack up fees as often as they can get away with. Makes everything 3-5% more expensive. Ridiculous.

hirundo 6y ago
Unregulated?! IMO they are heavily regulated. I can understand believing that they are under regulated, but they are hardly unregulated. E.g. https://www.fdic.gov/regulations/laws/rules/6500-2260.html https://www.fdic.gov/regulations/laws/rules/6500-2260.html https://www.creditcards.com/credit-card-news/help/card-act-12-consumer-protections-6000/ https://www.creditcards.com/credit-card-news/help/card-act-1... https://blog.payjunction.com/credit-card-processing-regulators https://blog.payjunction.com/credit-card-processing-regulato...
- tempsy 6y ago
  every industry is regulated to a certain degree, but categorizing an industry as a utility is a step change difference. in the US we do not regulate interchange fees except via Durbin Amendment (only passed 10 years ago) which regulates debit interchange for large banks only. this is totally different from Europe where interchange is heavily regulated.
shadowgovt 6y ago
There is 100% nothing stopping the Federal government from offering a full-faith-and-credit-backed "America electronic transaction system" for electronic transactions, with those fees handled by taxes. But much as there's nothing stopping the Federal government from greatly simplifying the burden and toil of tax season by issuing 90% of Americans a pre-filled-out "This is what you owe; sign this and return it or dispute it with your own filing," we won't do that because fully half of Congress is from a party that has, as a plank, that private institutions serve the public interest better than public institutions.
- cmrdporcupine 6y ago
  FWIW the Canadian tax system is heading in this direction. With electronic filing programs most things get pre-filled now with data from Canada Revenue Agency based on the information they've received from your employer, your bank, your trading institutions, etc. Then it's more a matter of going through and verifying information and adding in any missing information (for example sale info from my stock units held in my employer's US brokerage) and looking any deductions that might apply (and the set of those is shrinking, which imho is a good thing)
  - shadowgovt 6y ago
    It is a good thing. Private tax accountants are a huge political lobby in the US, so it's a non-starter here. The US barely got off the ground a free option for public e-filing, and we managed to botch it up by handing it to a private company to implement, which promptly turned around and made it absolutely as impossible to access as they were allowed to by law.
    - JAlexoid 6y ago
      US - the cronyism dream.
      - TheOtherHobbes 6y ago
        One way or another, those free markets always turn out to be really expensive for customers and users.
  - mikepurvis 6y ago
    Canadian here— there's definitely been a movement in recent years away from deductions in favour of direct payments throughout the year. Thinking especially of the child benefit and the carbon tax rebate, and the elimination of boutique credits like one that used to apply to the purchase of public transit passes (https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2017-building-a-strong-middle-class/public-transit-tax-credit.html https://www.canada.ca/en/revenue-agency/programs/about-canad...). I get that politicians like the psychology of people receiving a cheque or direct deposit vs a tax deduction ("it was my money all along"), but I think it is genuinely a positive step in terms of helping people at the low end of the economy who don't have the means to save receipts or jump through whatever other hoops are necessary to nickel and dime the government at tax time.
hyperbovine 6y ago
I can't see this duopoly persisting for that much longer. If I say the phrase "don't leave home without it", what is the first thing that comes to mind? I'm guessing it runs iOS or Android. In the long run, he who controls phones, controls payments. (Which actually strengthens TFA's case, if you think about it.) Visa and MC execs must know this and be scared shitless.
satyrnein 6y ago
I definitely have concerns about the stranglehold the payment processors have, but does it really make everything 3-5% more expensive? My understanding was that a good chunk of the 3% fee is given back to consumers as cash back or rewards, and that dealing with cash also had costs for businesses.
- revnode 6y ago
  This is correct. The best you can usually do is 2% cash back, so really the consumer is being charged 1% for the convenience of using a credit card. Obviously most consider that worth it, which is why credit cards are so popular.
  - tempsy 6y ago
    right now we have a situation where the rich (who pay for things with expensive premium credit cards) are being subsidized by the poor (using cash or basic credit cards) because interchange is much higher for the top of line credit cards.
    - deleted 6y ago
      [deleted]
  - treis 6y ago
    Retail isn't paying 3% on their transactions. It's more like 1% for card present transactions. Generally cashless is cheaper for the retailer. Fewer losses to employee fraud and robbery. You don't have to pay for employees to deposit cash. The downside is that you're liable to fraud and chargebacks.
  - xadhominemx 6y ago
    Banks basically break even on interchange after paying out awards and security costs and then the merchant acquirer + network get like .2% - 1% depending on the size of the merchant. V/M is one of the most benign duopolies out there.
    - 6y ago
dogma1138 6y ago
Payment processors and providers are regulated around the world and in the US, if the US wanted too they could cap fees they already do to some extent just not as much as say Europe.
- tempsy 6y ago
  every industry is regulated to a certain degree. making something a utility is a step change difference. interchange in the US is not regulated outside the Durbin Amendment for debit interchange for large banks. Visa and MC are way too lightly regulated when they are the gate keepers to a cashless world due to what I would consider a historical accident. No reason why these networks shouldn’t be utilities in a cashless world.
ISL 6y ago
In the long run, overpaying for electronic transactions should only be the case if the major card-issuers collude. Otherwise, vendors should gravitate to those issuers that yield acceptable service at the lowest price and customers should gravitate toward those issuers that deliver them the greatest value. Rewards-point/miles schemes are moderately insane, but they allow the customer to express their preferences with greater precision. Want to pay a lower effective transaction fee, perhaps at the risk of higher interest rates if you carry a balance? Choose a cash-back card. Perhaps 3-5% is actually what compliance/fraud-detection/customer-service/etc. ultimately requires? I was once a huge Bitcoin advocate; crypto transactions absolutely have a place in the world, but the true irreversibility of such transactions (at demonstrably lower costs) opens a huge door for nefarious actors.
- tempsy 6y ago
  it’s not - it wouldn’t be that expensive if interchange (biggest chunk of transaction processing) was more heavily regulated beyond the Durbin Amendment. right now we have a situation where the rich (who pay for things with expensive premium credit cards) are being subsidized by the poor (using cash or basic credit cards)
revnode 6y ago
While Visa and Mastercard are the big fish in the sea, they do have competition. There is also Discover and American Express. They also charge similar rates, which suggests that 3% fee isn't random. Not sure where 4%/5% came from, fees average out to somewhere between 2%-3% for small merchants.
- tempsy 6y ago
  almost all processors add a fixed fee on top of the 3% eg 30 cents. if you are a coffee shop or convenience store that is a much higher % of the average purchase price than a merchant that sells something more expensive.
- pb7 6y ago
  It's just price stickiness. Same reason why all music streaming platforms charge $10/month and something like $15/month for a family plan.
samaxe 6y ago
> It's crazy that we've given up control as a society of the only mechanisms for electronic payments It’s no the ONLY mechanism. Crypto currencies solve this issue. It’s the only mechanism for fiat currency.
patmorgan23 6y ago
ACH and Wire transfers exist. Also the Fed is developing a new instant payments system that will be launched in a few years.
- tempsy 6y ago
  yes i know that. are we going to back to the days where I pay for my groceries by writing a check? you can’t possibly be arguing that ACH and wire transfers make sense for everyday purchases.
  - elliekelly 6y ago
    Why wouldn’t ACH make sense for everyday purchases?
    - tempsy 6y ago
      are you asking me why it doesn’t make sense to write a check for every small purchase you make? if the Fed’s faster payment network goes live and makes ACH instantaneous can payments can be done with a QR code or something similar then that is viable but not right now. beyond that, almost no e-commerce store accepts ACH. It also doesn’t benefit the consumer to bother with the hassle of ACH vs card when there’s no discount...you’re just saving the merchant money. Amazon is the only one I can think of.
      - cycomanic 6y ago
        I'm always amazed when talking to US friends how far behind the rest of the world the US is with respect to banking. For a long time friends were telling me they were getting their salary, paying their rent etc. by cheque, when I had been using automatic wire transfers or debits for a long time already. With respect to your comment above, here in Scandinavia (where banks are also atrocious for other reasons) as well as much of Europe, with most of the internet payment processors (like Klarna) you can use wire transfer, debit from the account as well as direct internet banking for online shopping. We also have swish, which is a payment system were you essentially wire transfer money by using the mobile number. That said many people (myself included) also use credit cards for their convenience.
ATsch 6y ago
The big problem with the Visa/MC duopoly isn't the lack of regulation or enforcement of antitrust. It's that the US government, unlike many other countries on earth, does not provide adequate and free payment services to citizens itself.
rootsudo 6y ago
Not just the fees, but how they can suppress free speech and whatever they deem "unworthy." Granted a lot of it comes from risk management.
tuna-piano 6y ago
I don't think this analysis is correct. While it's true many merchants pay 1-3% in processing fees, many of the costs involved are real. Building the network, fraud, rewards to consumers, etc. Visa's net income is roughly $11 billion a year[1], and they process roughly $11 trillion a year[2]. So their take is ~.1%, not 3-5%. Note that this ignores that banks may make money off these transactions as well. May be better to look at Discover (the lender and the network) instead of Visa. But I'd think the total take from these companies is much closer to .1% than even 1%. [1]https://finance.yahoo.com/quote/V/financials/ https://finance.yahoo.com/quote/V/financials/ [2]https://usa.visa.com/dam/VCOM/download/corporate/media/visanet-technology/aboutvisafactsheet.pdf https://usa.visa.com/dam/VCOM/download/corporate/media/visan...
- tempsy 6y ago
  the 3-5% number is just a reference to the total “tax” merchants pay for payment processing as a whole - I get that most of that is the interchange fee that is paid out to issuers. but Visa and MC are the ones who dictate the interchange fee rates that issuers receive outside of the Durbin Amendment which capped debit interchange for large banks.
- JAlexoid 6y ago
  You seem to think that Visa is a bigger thing, than it actually is. That 3% is the total cost to the merchant. Visa is just a payments network. It is not the payment processor(the company that the card terminals connect to). They are not the issuer - the banks that charge as well. Visa facilitates integration between different payment processors and issuers, they don't even handle fraud or low level stuff.
drawkbox 6y ago
Yeah banking and ISPs or the network utility need to be regulated as utilities first. They are both "too big to fail" and local monopolies respectively and they are both abusing their position. A competing banking system through the USPS is a great idea that needs to be remade, it worked well for a long time in the US [1]. It would eliminate the predatory checks cashed industry and credit through the system would be competitive to keep the private systems in check, much like the USPS does other delivery services or Federal student loan rates keep private rates in check. The same needs to happen for healthcare with a public option. When you have public systems, the private ones have to compete more, it is a win for everyone. The network utility needs to be split, lines handled by power companies that know how to run a utility, and then the servicers on top that are competitive would also be interest aligned with the network utility users. I have no doubt this "Google should be regulated as a utility" is being pushed by ISPs that know they are utilities but fought to remove that classification. They deserve to lose their local monopolies and right to that because they abused their position and have turned rent-seeking over capacity expansion with data caps, overloaded nodes, prioritization, dropped packets, all incentives to NOT expand the capacity which is a major problem when the market incentives are aligned against the interests of the country, products and innovation. [1] https://en.wikipedia.org/wiki/United_States_Postal_Savings_System https://en.wikipedia.org/wiki/United_States_Postal_Savings_S...
jancsika 6y ago
This is a beautiful implementation of a tactic to shift a conversation. OP starts with a seemingly related pivot to the topic of how to prioritize the regulation of a company like Google with the regulation of other companies. Such a conversation would obviously involve at least few points about why Google ought not top the list. (And hopefully many points given OP says Google is "by far" not top priority.) I was certainly interested to read such a digression... Then, like Alan Sokal's prank[1], OP leaves out any argument for that prioritization. Instead, OP moves directly to complaining about the other companies which OP has declared by fiat should take priority. And, voila! Every single comment below OP at the time of this writing similarly avoids the ostensible discussion about Google's prioritization, instead discussing only the other companies and the efficacy of their regulation. Potential regulation of Google as a topic is completely avoided in any of the child nodes of this OP. Whether this was intentional or not, it makes an excellent archetype for this tactic. 1: https://en.wikipedia.org/wiki/Alan_Sokal https://en.wikipedia.org/wiki/Alan_Sokal
- marta_morena_25 6y ago
  Anyway, there are bigger problems in the world than Google. While I am not sure payment processing is more urgent that regulating Google, there are many other things that are orders of magnitudes more important to tackle than regulating Google.
  - Supermancho 6y ago
    "Anyway", talking about the relative morality of the discussion is a derail from the ostensible topic.
    - ewzimm 6y ago
      Anyway, on the topic, none of the reasons presented in the article seem compelling. Government regulation should step in when consumers have no choice but to use something that has achieved a monopoly, and the payment networks mentioned do make a more compelling case. It seems inappropriate for regulation to step in when something happens to be popular but there are equal or better alternatives easily available, and changing to a different search engine is about the easiest change a person could make in their life. In the case of mitigating any bad behavior by Google, there's a very easy alternative solution for the problem, which is to convince people to use other search engines. I haven't used Google as mine for over 15 years and I don't believe I've suffered at all for it. I've found DuckDuckGo to perfectly suit my needs. Google run as a public utility could potentially hurt all the other search engines that many would consider to be superior solutions already.
pmoriarty 6y ago
"It's crazy that we've given up control as a society of the only mechanisms for electronic payments in an increasingly cashless world to unregulated private entities who continue to jack up fees as often as they can get away with." Regarding such jacking up of fees, it seems that nearly every month PG&E, a regulated utility company in California, sends notices of price hikes. I'm not sure how they manage to get away with this, but it makes me skeptical that merely regulating a company, or even nationalizing it, will be sufficient to keep rates low, since regulatory capture will continue to be a possibility. Further, its an open secret that the very politicians who are tasked with regulating industry are often former (or future) executives in the very companies they regulate. Political office is a revolving door for industry executives, which regularly land well paid jobs in those same industries after retiring from politics. I'm not sure how to solve this problem, but we need to look at it squarely in the face and not labor under the illusion that government and corporations are clearly separate nor diametrically opposed entities.
the-dude 6y ago
The Dutch payment system iDeal charges between a couple of cents for the big retailers to maybe 15 - 20 cents for small fish. These fees are absolute, not relative to the purchase amount. edit : I meant our PIN payments card, not iDeal. But the point is true for both.
- xadhominemx 6y ago
  Sure but almost all interchange flows right back to the consumer via cash rewards
jimmaswell 6y ago
Payment processor monopolies are also strangling expression and innovation by getting to decide you can't use them for e.g. adult content.
pc86 6y ago
Said as a former brick-and-mortar business owner, if CC fees disappeared overnight, companies with breathe a sigh of relief and proceed to not lower prices one cent. Nobody is making purchasing decisions based on a 1% different in price for a car, let alone day-to-day purchases.

by tempsy 6y ago

hirundo 6y ago

Unregulated?! IMO they are heavily regulated. I can understand believing that they are under regulated, but they are hardly unregulated. E.g. https://www.fdic.gov/regulations/laws/rules/6500-2260.html https://www.fdic.gov/regulations/laws/rules/6500-2260.html https://www.creditcards.com/credit-card-news/help/card-act-12-consumer-protections-6000/ https://www.creditcards.com/credit-card-news/help/card-act-1... https://blog.payjunction.com/credit-card-processing-regulators https://blog.payjunction.com/credit-card-processing-regulato...

tempsy 6y ago
every industry is regulated to a certain degree, but categorizing an industry as a utility is a step change difference. in the US we do not regulate interchange fees except via Durbin Amendment (only passed 10 years ago) which regulates debit interchange for large banks only. this is totally different from Europe where interchange is heavily regulated.

shadowgovt 6y ago

There is 100% nothing stopping the Federal government from offering a full-faith-and-credit-backed "America electronic transaction system" for electronic transactions, with those fees handled by taxes. But much as there's nothing stopping the Federal government from greatly simplifying the burden and toil of tax season by issuing 90% of Americans a pre-filled-out "This is what you owe; sign this and return it or dispute it with your own filing," we won't do that because fully half of Congress is from a party that has, as a plank, that private institutions serve the public interest better than public institutions.

cmrdporcupine 6y ago
FWIW the Canadian tax system is heading in this direction. With electronic filing programs most things get pre-filled now with data from Canada Revenue Agency based on the information they've received from your employer, your bank, your trading institutions, etc. Then it's more a matter of going through and verifying information and adding in any missing information (for example sale info from my stock units held in my employer's US brokerage) and looking any deductions that might apply (and the set of those is shrinking, which imho is a good thing)
- shadowgovt 6y ago
  It is a good thing. Private tax accountants are a huge political lobby in the US, so it's a non-starter here. The US barely got off the ground a free option for public e-filing, and we managed to botch it up by handing it to a private company to implement, which promptly turned around and made it absolutely as impossible to access as they were allowed to by law.
  - JAlexoid 6y ago
    US - the cronyism dream.
    - TheOtherHobbes 6y ago
      One way or another, those free markets always turn out to be really expensive for customers and users.
- mikepurvis 6y ago
  Canadian here— there's definitely been a movement in recent years away from deductions in favour of direct payments throughout the year. Thinking especially of the child benefit and the carbon tax rebate, and the elimination of boutique credits like one that used to apply to the purchase of public transit passes (https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2017-building-a-strong-middle-class/public-transit-tax-credit.html https://www.canada.ca/en/revenue-agency/programs/about-canad...). I get that politicians like the psychology of people receiving a cheque or direct deposit vs a tax deduction ("it was my money all along"), but I think it is genuinely a positive step in terms of helping people at the low end of the economy who don't have the means to save receipts or jump through whatever other hoops are necessary to nickel and dime the government at tax time.

hyperbovine 6y ago

I can't see this duopoly persisting for that much longer. If I say the phrase "don't leave home without it", what is the first thing that comes to mind? I'm guessing it runs iOS or Android. In the long run, he who controls phones, controls payments. (Which actually strengthens TFA's case, if you think about it.) Visa and MC execs must know this and be scared shitless.

satyrnein 6y ago

I definitely have concerns about the stranglehold the payment processors have, but does it really make everything 3-5% more expensive? My understanding was that a good chunk of the 3% fee is given back to consumers as cash back or rewards, and that dealing with cash also had costs for businesses.

revnode 6y ago
This is correct. The best you can usually do is 2% cash back, so really the consumer is being charged 1% for the convenience of using a credit card. Obviously most consider that worth it, which is why credit cards are so popular.
- tempsy 6y ago
  right now we have a situation where the rich (who pay for things with expensive premium credit cards) are being subsidized by the poor (using cash or basic credit cards) because interchange is much higher for the top of line credit cards.
  - deleted 6y ago
    [deleted]
- treis 6y ago
  Retail isn't paying 3% on their transactions. It's more like 1% for card present transactions. Generally cashless is cheaper for the retailer. Fewer losses to employee fraud and robbery. You don't have to pay for employees to deposit cash. The downside is that you're liable to fraud and chargebacks.
- xadhominemx 6y ago
  Banks basically break even on interchange after paying out awards and security costs and then the merchant acquirer + network get like .2% - 1% depending on the size of the merchant. V/M is one of the most benign duopolies out there.
  - 6y ago

dogma1138 6y ago

Payment processors and providers are regulated around the world and in the US, if the US wanted too they could cap fees they already do to some extent just not as much as say Europe.

tempsy 6y ago
every industry is regulated to a certain degree. making something a utility is a step change difference. interchange in the US is not regulated outside the Durbin Amendment for debit interchange for large banks. Visa and MC are way too lightly regulated when they are the gate keepers to a cashless world due to what I would consider a historical accident. No reason why these networks shouldn’t be utilities in a cashless world.

ISL 6y ago

In the long run, overpaying for electronic transactions should only be the case if the major card-issuers collude. Otherwise, vendors should gravitate to those issuers that yield acceptable service at the lowest price and customers should gravitate toward those issuers that deliver them the greatest value. Rewards-point/miles schemes are moderately insane, but they allow the customer to express their preferences with greater precision. Want to pay a lower effective transaction fee, perhaps at the risk of higher interest rates if you carry a balance? Choose a cash-back card. Perhaps 3-5% is actually what compliance/fraud-detection/customer-service/etc. ultimately requires? I was once a huge Bitcoin advocate; crypto transactions absolutely have a place in the world, but the true irreversibility of such transactions (at demonstrably lower costs) opens a huge door for nefarious actors.

tempsy 6y ago
it’s not - it wouldn’t be that expensive if interchange (biggest chunk of transaction processing) was more heavily regulated beyond the Durbin Amendment. right now we have a situation where the rich (who pay for things with expensive premium credit cards) are being subsidized by the poor (using cash or basic credit cards)

revnode 6y ago

While Visa and Mastercard are the big fish in the sea, they do have competition. There is also Discover and American Express. They also charge similar rates, which suggests that 3% fee isn't random. Not sure where 4%/5% came from, fees average out to somewhere between 2%-3% for small merchants.

tempsy 6y ago
almost all processors add a fixed fee on top of the 3% eg 30 cents. if you are a coffee shop or convenience store that is a much higher % of the average purchase price than a merchant that sells something more expensive.
pb7 6y ago
It's just price stickiness. Same reason why all music streaming platforms charge $10/month and something like $15/month for a family plan.

samaxe 6y ago

> It's crazy that we've given up control as a society of the only mechanisms for electronic payments It’s no the ONLY mechanism. Crypto currencies solve this issue. It’s the only mechanism for fiat currency.

patmorgan23 6y ago

ACH and Wire transfers exist. Also the Fed is developing a new instant payments system that will be launched in a few years.

tempsy 6y ago
yes i know that. are we going to back to the days where I pay for my groceries by writing a check? you can’t possibly be arguing that ACH and wire transfers make sense for everyday purchases.
- elliekelly 6y ago
  Why wouldn’t ACH make sense for everyday purchases?
  - tempsy 6y ago
    are you asking me why it doesn’t make sense to write a check for every small purchase you make? if the Fed’s faster payment network goes live and makes ACH instantaneous can payments can be done with a QR code or something similar then that is viable but not right now. beyond that, almost no e-commerce store accepts ACH. It also doesn’t benefit the consumer to bother with the hassle of ACH vs card when there’s no discount...you’re just saving the merchant money. Amazon is the only one I can think of.
    - cycomanic 6y ago
      I'm always amazed when talking to US friends how far behind the rest of the world the US is with respect to banking. For a long time friends were telling me they were getting their salary, paying their rent etc. by cheque, when I had been using automatic wire transfers or debits for a long time already. With respect to your comment above, here in Scandinavia (where banks are also atrocious for other reasons) as well as much of Europe, with most of the internet payment processors (like Klarna) you can use wire transfer, debit from the account as well as direct internet banking for online shopping. We also have swish, which is a payment system were you essentially wire transfer money by using the mobile number. That said many people (myself included) also use credit cards for their convenience.

ATsch 6y ago

The big problem with the Visa/MC duopoly isn't the lack of regulation or enforcement of antitrust. It's that the US government, unlike many other countries on earth, does not provide adequate and free payment services to citizens itself.

rootsudo 6y ago

Not just the fees, but how they can suppress free speech and whatever they deem "unworthy." Granted a lot of it comes from risk management.

tuna-piano 6y ago

I don't think this analysis is correct. While it's true many merchants pay 1-3% in processing fees, many of the costs involved are real. Building the network, fraud, rewards to consumers, etc. Visa's net income is roughly $11 billion a year[1], and they process roughly $11 trillion a year[2]. So their take is ~.1%, not 3-5%. Note that this ignores that banks may make money off these transactions as well. May be better to look at Discover (the lender and the network) instead of Visa. But I'd think the total take from these companies is much closer to .1% than even 1%. [1]https://finance.yahoo.com/quote/V/financials/ https://finance.yahoo.com/quote/V/financials/ [2]https://usa.visa.com/dam/VCOM/download/corporate/media/visanet-technology/aboutvisafactsheet.pdf https://usa.visa.com/dam/VCOM/download/corporate/media/visan...

tempsy 6y ago
the 3-5% number is just a reference to the total “tax” merchants pay for payment processing as a whole - I get that most of that is the interchange fee that is paid out to issuers. but Visa and MC are the ones who dictate the interchange fee rates that issuers receive outside of the Durbin Amendment which capped debit interchange for large banks.
JAlexoid 6y ago
You seem to think that Visa is a bigger thing, than it actually is. That 3% is the total cost to the merchant. Visa is just a payments network. It is not the payment processor(the company that the card terminals connect to). They are not the issuer - the banks that charge as well. Visa facilitates integration between different payment processors and issuers, they don't even handle fraud or low level stuff.

drawkbox 6y ago

Yeah banking and ISPs or the network utility need to be regulated as utilities first. They are both "too big to fail" and local monopolies respectively and they are both abusing their position. A competing banking system through the USPS is a great idea that needs to be remade, it worked well for a long time in the US [1]. It would eliminate the predatory checks cashed industry and credit through the system would be competitive to keep the private systems in check, much like the USPS does other delivery services or Federal student loan rates keep private rates in check. The same needs to happen for healthcare with a public option. When you have public systems, the private ones have to compete more, it is a win for everyone. The network utility needs to be split, lines handled by power companies that know how to run a utility, and then the servicers on top that are competitive would also be interest aligned with the network utility users. I have no doubt this "Google should be regulated as a utility" is being pushed by ISPs that know they are utilities but fought to remove that classification. They deserve to lose their local monopolies and right to that because they abused their position and have turned rent-seeking over capacity expansion with data caps, overloaded nodes, prioritization, dropped packets, all incentives to NOT expand the capacity which is a major problem when the market incentives are aligned against the interests of the country, products and innovation. [1] https://en.wikipedia.org/wiki/United_States_Postal_Savings_System https://en.wikipedia.org/wiki/United_States_Postal_Savings_S...

jancsika 6y ago

This is a beautiful implementation of a tactic to shift a conversation. OP starts with a seemingly related pivot to the topic of how to prioritize the regulation of a company like Google with the regulation of other companies. Such a conversation would obviously involve at least few points about why Google ought not top the list. (And hopefully many points given OP says Google is "by far" not top priority.) I was certainly interested to read such a digression... Then, like Alan Sokal's prank[1], OP leaves out any argument for that prioritization. Instead, OP moves directly to complaining about the other companies which OP has declared by fiat should take priority. And, voila! Every single comment below OP at the time of this writing similarly avoids the ostensible discussion about Google's prioritization, instead discussing only the other companies and the efficacy of their regulation. Potential regulation of Google as a topic is completely avoided in any of the child nodes of this OP. Whether this was intentional or not, it makes an excellent archetype for this tactic. 1: https://en.wikipedia.org/wiki/Alan_Sokal https://en.wikipedia.org/wiki/Alan_Sokal

marta_morena_25 6y ago
Anyway, there are bigger problems in the world than Google. While I am not sure payment processing is more urgent that regulating Google, there are many other things that are orders of magnitudes more important to tackle than regulating Google.
- Supermancho 6y ago
  "Anyway", talking about the relative morality of the discussion is a derail from the ostensible topic.
  - ewzimm 6y ago
    Anyway, on the topic, none of the reasons presented in the article seem compelling. Government regulation should step in when consumers have no choice but to use something that has achieved a monopoly, and the payment networks mentioned do make a more compelling case. It seems inappropriate for regulation to step in when something happens to be popular but there are equal or better alternatives easily available, and changing to a different search engine is about the easiest change a person could make in their life. In the case of mitigating any bad behavior by Google, there's a very easy alternative solution for the problem, which is to convince people to use other search engines. I haven't used Google as mine for over 15 years and I don't believe I've suffered at all for it. I've found DuckDuckGo to perfectly suit my needs. Google run as a public utility could potentially hurt all the other search engines that many would consider to be superior solutions already.

pmoriarty 6y ago

"It's crazy that we've given up control as a society of the only mechanisms for electronic payments in an increasingly cashless world to unregulated private entities who continue to jack up fees as often as they can get away with." Regarding such jacking up of fees, it seems that nearly every month PG&E, a regulated utility company in California, sends notices of price hikes. I'm not sure how they manage to get away with this, but it makes me skeptical that merely regulating a company, or even nationalizing it, will be sufficient to keep rates low, since regulatory capture will continue to be a possibility. Further, its an open secret that the very politicians who are tasked with regulating industry are often former (or future) executives in the very companies they regulate. Political office is a revolving door for industry executives, which regularly land well paid jobs in those same industries after retiring from politics. I'm not sure how to solve this problem, but we need to look at it squarely in the face and not labor under the illusion that government and corporations are clearly separate nor diametrically opposed entities.

the-dude 6y ago

The Dutch payment system iDeal charges between a couple of cents for the big retailers to maybe 15 - 20 cents for small fish. These fees are absolute, not relative to the purchase amount. edit : I meant our PIN payments card, not iDeal. But the point is true for both.

xadhominemx 6y ago
Sure but almost all interchange flows right back to the consumer via cash rewards

jimmaswell 6y ago

Payment processor monopolies are also strangling expression and innovation by getting to decide you can't use them for e.g. adult content.

pc86 6y ago

Said as a former brick-and-mortar business owner, if CC fees disappeared overnight, companies with breathe a sigh of relief and proceed to not lower prices one cent. Nobody is making purchasing decisions based on a 1% different in price for a car, let alone day-to-day purchases.