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Wouldn’t it be nice if banks charged a fixed fee for a loan no matter the size? Visa/MasterCard/etc are not comparable here because they are financing transacti

Wouldn’t it be nice if banks charged a fixed fee for a loan no matter the size? Visa/MasterCard/etc are not comparable here because they are financing transactions which do have percentage based mechanisms such as % of fraud or % charged back.

skeptical_dog 6y ago
The cost to the issuer is proportional to the size of the purchase in the case of credit default or fraud. So a fixed fee does not make sense for loans. This isn't the case for the App Store. BTW, Visa/MasterCard don't manage risk afaik -- the card issuing banks do that. Visa just connects the pos terminal etc to the right bank.
- hervature 6y ago
  That's exactly what I'm saying. I'm responding to someone who said that we as a society have accepted % of revenue based charging BECAUSE Visa et al. have models like that. I'm pointing it out that they have % of revenue models because their costs are directly tied to revenue. I'm not even going to get into cash back and points and international transactions which are one-to-one relationships with how much is being charged, but do you really think the banks pay for the privilege of being part of Visa? No, Visa has costs at least somewhat proportional to the volume going through that bank.
xwolfi 6y ago
Banks and loan are not a good comparison since you ll most likely understand a million euros loan will be harder to produce for the bank than a 1000 one. Taking a percent is fine. Tbh it would be fine if Apple charged per bandwidth usage. But taking 50 or 500 euros in wont change how much it cost them to deliver the app.
- hervature 6y ago
  That was entirely my point. I was responding to a comment that says we have precedent in accepting % revenue models because Visa has one. I'm pointing out to them that in finance, percentage of dollar amount is normal and orthogonal to the App Store model.

skeptical_dog 6y ago

The cost to the issuer is proportional to the size of the purchase in the case of credit default or fraud. So a fixed fee does not make sense for loans. This isn't the case for the App Store. BTW, Visa/MasterCard don't manage risk afaik -- the card issuing banks do that. Visa just connects the pos terminal etc to the right bank.

hervature 6y ago
That's exactly what I'm saying. I'm responding to someone who said that we as a society have accepted % of revenue based charging BECAUSE Visa et al. have models like that. I'm pointing it out that they have % of revenue models because their costs are directly tied to revenue. I'm not even going to get into cash back and points and international transactions which are one-to-one relationships with how much is being charged, but do you really think the banks pay for the privilege of being part of Visa? No, Visa has costs at least somewhat proportional to the volume going through that bank.

xwolfi 6y ago

Banks and loan are not a good comparison since you ll most likely understand a million euros loan will be harder to produce for the bank than a 1000 one. Taking a percent is fine. Tbh it would be fine if Apple charged per bandwidth usage. But taking 50 or 500 euros in wont change how much it cost them to deliver the app.

hervature 6y ago
That was entirely my point. I was responding to a comment that says we have precedent in accepting % revenue models because Visa has one. I'm pointing out to them that in finance, percentage of dollar amount is normal and orthogonal to the App Store model.