4 ms·

The trouble is that Visa/Mastercard/Amex are all american corporations who have effectively extracted a ~1% tax on a large proportion of every in-person non-cas

The trouble is that Visa/Mastercard/Amex are all american corporations who have effectively extracted a ~1% tax on a large proportion of every in-person non-cash monetary transaction worldwide. That's a huge amount of power for an unelected, unaccountable organisation to have, and one that returns money to its american shareowners and employees only. Exactly how the tax is collected is a matter for the businesses to hide. I don't like it one bit, but there's nothing I can do about it.

Youden 5y ago
Maybe you simply intended your comment as hyperbole but if not: - It's not a 1% tax worldwide. For example most of Europe uses debit cards instead of credit and the fees are regulated to be much lower than 1%. This also demonstrates that Visa's power is not unchecked. - Visa may be listed on American exchanges but foreign nationals can buy shares no problems. On the percentage, I was curious and had a look at Visa's financials [0]. On payment volume of $10.4T, they reported revenue of $24.1B, so they get about 0.2% overall. [0]: https://annualreport.visa.com/financials/default.aspx https://annualreport.visa.com/financials/default.aspx
- ricardobeat 5y ago
  I'm curious how the numbers look to get to that result. The lowest rate I've heard of was ~0.7%.
  - MagnumOpus 5y ago
    EU maximum for debit cards is 0.2% and for debit cards is 0.3%. Major clients like Amazon, Tesco or Aldi have leverage and probably pay half that... https://www.linklaters.com/en/insights/blogs/fintechlinks/2020/july/eu-retains-interchange-fee-cap-on-card-payments-for-now https://www.linklaters.com/en/insights/blogs/fintechlinks/20...
    - ricardobeat 5y ago
      Isnt the majority of VISA transactions on credit cards, not debit? Those have rates in the 1-3% range, so even with the lower debit rates everything should average to more than 0.2%.
      - rswail 5y ago
        The end merchant pays 1-3%, then there are a whole bunch of middle-people that take a cut. The merchant acquirer (eg Stripe), the merchant bank, the issuer bank, the tokenization service (if using Apple/Google/Samsung Pay), there's a long list of people taking part of that fee. Visa as the network operator takes some of that cut as well, depending on the type of transaction, the type of card (debit vs credit vs "premium" credit). It's much more complicated than Visa getting all of the merchant fee.
      - Youden 5y ago
        I don't know about Visa specifically but debit cards are about twice as popular than credit in the US [0]. As a non-American, though I don't have a source off the top of my head, I think that outside the US credit cards are even rarer. [0]: https://www.creditcards.com/credit-card-news/debit-card-statistics-1276/ https://www.creditcards.com/credit-card-news/debit-card-stat...
- moeadham 5y ago
  Yeah, visa and it’s partners collect the 1% tax. Don’t forget the cut squiring banks take.
kzrdude 5y ago
EU law has regulated the maximum fee down to 0.2% for debit and 0.3% for credit cards since 2015, I don't know if it has further progressed since then. But regulation is clearly needed, since these "taxes" on transactions create an inefficient market and they want to encourage, not discourage card transactions. It should be down to the level already that the big stores think that card handling is cheaper than handling cash.
School-Cotton 5y ago
> and one that returns money to its american shareowners and employees only This isn’t quite right. Nothing stops British people from becoming shareholders of Visa. I don’t see how the nationality of the company matters. If a private British company were extracting this tax for the benefit of its shareholders, why would the fact that it’s your own countrymen screwing you make you feel any better?
- MagnumOpus 5y ago
  Your point is correct, but nationality matters (a) because Visa et al. pay taxes in the US and not the UK (b) because most higher-up employees of Visa et al. are based in the US and pay taxes there and not in the UK (c) because the executives are not on-shore, they can sell customer transaction data to US TLAs and anyone else with near-impunity.
- rswail 5y ago
  Visa as an American corporation is subject to American law. So it's not just a matter of who is making the profit.

Youden 5y ago

Maybe you simply intended your comment as hyperbole but if not: - It's not a 1% tax worldwide. For example most of Europe uses debit cards instead of credit and the fees are regulated to be much lower than 1%. This also demonstrates that Visa's power is not unchecked. - Visa may be listed on American exchanges but foreign nationals can buy shares no problems. On the percentage, I was curious and had a look at Visa's financials [0]. On payment volume of $10.4T, they reported revenue of $24.1B, so they get about 0.2% overall. [0]: https://annualreport.visa.com/financials/default.aspx https://annualreport.visa.com/financials/default.aspx

ricardobeat 5y ago
I'm curious how the numbers look to get to that result. The lowest rate I've heard of was ~0.7%.
- MagnumOpus 5y ago
  EU maximum for debit cards is 0.2% and for debit cards is 0.3%. Major clients like Amazon, Tesco or Aldi have leverage and probably pay half that... https://www.linklaters.com/en/insights/blogs/fintechlinks/2020/july/eu-retains-interchange-fee-cap-on-card-payments-for-now https://www.linklaters.com/en/insights/blogs/fintechlinks/20...
  - ricardobeat 5y ago
    Isnt the majority of VISA transactions on credit cards, not debit? Those have rates in the 1-3% range, so even with the lower debit rates everything should average to more than 0.2%.
    - rswail 5y ago
      The end merchant pays 1-3%, then there are a whole bunch of middle-people that take a cut. The merchant acquirer (eg Stripe), the merchant bank, the issuer bank, the tokenization service (if using Apple/Google/Samsung Pay), there's a long list of people taking part of that fee. Visa as the network operator takes some of that cut as well, depending on the type of transaction, the type of card (debit vs credit vs "premium" credit). It's much more complicated than Visa getting all of the merchant fee.
    - Youden 5y ago
      I don't know about Visa specifically but debit cards are about twice as popular than credit in the US [0]. As a non-American, though I don't have a source off the top of my head, I think that outside the US credit cards are even rarer. [0]: https://www.creditcards.com/credit-card-news/debit-card-statistics-1276/ https://www.creditcards.com/credit-card-news/debit-card-stat...
moeadham 5y ago
Yeah, visa and it’s partners collect the 1% tax. Don’t forget the cut squiring banks take.

kzrdude 5y ago

EU law has regulated the maximum fee down to 0.2% for debit and 0.3% for credit cards since 2015, I don't know if it has further progressed since then. But regulation is clearly needed, since these "taxes" on transactions create an inefficient market and they want to encourage, not discourage card transactions. It should be down to the level already that the big stores think that card handling is cheaper than handling cash.

School-Cotton 5y ago

> and one that returns money to its american shareowners and employees only This isn’t quite right. Nothing stops British people from becoming shareholders of Visa. I don’t see how the nationality of the company matters. If a private British company were extracting this tax for the benefit of its shareholders, why would the fact that it’s your own countrymen screwing you make you feel any better?

MagnumOpus 5y ago
Your point is correct, but nationality matters (a) because Visa et al. pay taxes in the US and not the UK (b) because most higher-up employees of Visa et al. are based in the US and pay taxes there and not in the UK (c) because the executives are not on-shore, they can sell customer transaction data to US TLAs and anyone else with near-impunity.
rswail 5y ago
Visa as an American corporation is subject to American law. So it's not just a matter of who is making the profit.