6 ms·

I'm grumpy about Visa/MC taking 3% of every transaction. I want a technofix for that. There are new blockchains that cost less than a penny per transaction use

I'm grumpy about Visa/MC taking 3% of every transaction. I want a technofix for that. There are new blockchains that cost less than a penny per transaction use about a millionth of the wattage of bitcoin and I hope they turn out to be non-BS. I just want an efficient low-cost barrierless payment network.

maccard 4y ago
Where are you located that visa and MasterCard are charging 3%? In the EU the fees are limited to 0.3%, and in other areas (e.g. the UK) it's 1%. As a card holder I'm pretty happy to pay a ~0.3% service fee to know that I have recourse with a merchant, for example. > I just want an efficient low-cost barrierless payment network. Whats low cost to you then?
- hocuspocus 4y ago
  Note that the 0.3% cap is on the interchange, i.e. the fee that goes back to the card issuer, it doesn't affect Visa and Mastercard directly. PSPs in the EU/EEA charge around 1% overall, a bit more to small businesses (for instance SumUp), and a bit less to the really big retailers that have more bargaining power.
  - maccard 4y ago
    I'm aware of that, but OP was talking about 3% of his transaction going to visa/mc, not stripe/sumup.
- xvello 4y ago
  > Where are you located that visa and MasterCard are charging 3%? I am guessing the good old unregulated free market of the US of A: https://www.valuepenguin.com/what-credit-card-processing-fees-costs https://www.valuepenguin.com/what-credit-card-processing-fee... There, banks and credit card companies offer huge perks and cash-back to card holders. That money must come from somewhere, and that's from the transaction fees paid by merchants (and transitively customers, as merchants still need to make a profit). AMEX has even higher transaction fees, which is why some businesses don't accept it. The situation is now at an idiotic local maximum: if I don't use one of these cashbacks cards, I am losing money paying for my neighbor's air miles, as I don't get a discount anyway. You don't need a "technofix" for that, you need regulations that cap interchange fees like the EU.
  - maccard 4y ago
    I don't know who ValuePenguin are, but those rates are definitely misleading. The interchange setup in the US is nuts, but only the highest tier of rewards cards are 3%, when used to purchase travel (see mastercard [0]). The vast majority are 1-1.5% ish. I will admit that this is higher than I expected, but MasterCardaren't taking a 3% cut of every card transaction. > AMEX has even higher transaction fees, which is why some businesses don't accept it. Given the opacity of the fees (or "discounts") as amex calls them, I don't know how to believe this. Lots of retailers in the EU don't accept them, yet amex are bound by the same interchange limits as Visa and Mastercard. How much of this is actually true and how much is "well it was true 30 years ago and I've not questioned it" > You don't need a "technofix" for that, you need regulations that cap interchange fees like the EU. Agreed. And using crypto to limit network fees is a terrible idea. I just had a quick look and the current gas fee for ethereum is $20! [0] https://www.mastercard.us/content/dam/public/mastercardcom/na/us/en/documents/merchant-rates-2021-2022-apr-2021.pdf https://www.mastercard.us/content/dam/public/mastercardcom/n...
hocuspocus 4y ago
> I'm grumpy about Visa/MC taking 3% of every transaction They don't. Scheme fees in a 4-party payment network are the smallest part of the net fee, around 0.1-0.2%. > I want a technofix for that. And you'll never get one. Moving money between bank accounts in an immutable way is extremely cheap already. But that isn't what people want. If you want to lower card payment fees you need to introduce regulations that cap the interchange and prevent fraud, it's purely a political fix.
- mattdesl 4y ago
  > Moving money between bank accounts in an immutable way is extremely cheap already. Only true in certain countries, between certain banks/processors, and within certain thresholds. My last last transaction fee on Tezos was a fixed cost of 0.000544 xtz ($0.00177 USD), had no threshold limitations, required zero privacy invasion, settled in ~30 seconds, and was not limited to a particular bank or regional currency. This is essentially the 'technofix' that crypto users want to see adopted by the rest of the financial sector.
  - hocuspocus 4y ago
    And they won't, because once again, regulatory problems don't have technological solutions.
    - mattdesl 4y ago
      The achievements I listed cannot only be solved with regulation.
pid-1 4y ago
If you think about blockchain fundamentals, they will always be expensive. How does a global network of peers can have transactions verified by majorities while being cheap? Basically you could say crypto fees are the price you pay for not trusting anyone. Using crypto is only a good alternative if you live in a society so fucked up citizens can't trust any bit of the contingent financial system.
- lukeramsden 4y ago
  In the most abstract sense, with a blockchain you’re paying for the _consensus_, not the _computation_ to handle transactions - and there are projects (such as Starkware) aimed at taking that to its logical conclusion, using computation proofs to reduce the cost of transactions by orders of magnitude.

maccard 4y ago

Where are you located that visa and MasterCard are charging 3%? In the EU the fees are limited to 0.3%, and in other areas (e.g. the UK) it's 1%. As a card holder I'm pretty happy to pay a ~0.3% service fee to know that I have recourse with a merchant, for example. > I just want an efficient low-cost barrierless payment network. Whats low cost to you then?

hocuspocus 4y ago
Note that the 0.3% cap is on the interchange, i.e. the fee that goes back to the card issuer, it doesn't affect Visa and Mastercard directly. PSPs in the EU/EEA charge around 1% overall, a bit more to small businesses (for instance SumUp), and a bit less to the really big retailers that have more bargaining power.
- maccard 4y ago
  I'm aware of that, but OP was talking about 3% of his transaction going to visa/mc, not stripe/sumup.
xvello 4y ago
> Where are you located that visa and MasterCard are charging 3%? I am guessing the good old unregulated free market of the US of A: https://www.valuepenguin.com/what-credit-card-processing-fees-costs https://www.valuepenguin.com/what-credit-card-processing-fee... There, banks and credit card companies offer huge perks and cash-back to card holders. That money must come from somewhere, and that's from the transaction fees paid by merchants (and transitively customers, as merchants still need to make a profit). AMEX has even higher transaction fees, which is why some businesses don't accept it. The situation is now at an idiotic local maximum: if I don't use one of these cashbacks cards, I am losing money paying for my neighbor's air miles, as I don't get a discount anyway. You don't need a "technofix" for that, you need regulations that cap interchange fees like the EU.
- maccard 4y ago
  I don't know who ValuePenguin are, but those rates are definitely misleading. The interchange setup in the US is nuts, but only the highest tier of rewards cards are 3%, when used to purchase travel (see mastercard [0]). The vast majority are 1-1.5% ish. I will admit that this is higher than I expected, but MasterCardaren't taking a 3% cut of every card transaction. > AMEX has even higher transaction fees, which is why some businesses don't accept it. Given the opacity of the fees (or "discounts") as amex calls them, I don't know how to believe this. Lots of retailers in the EU don't accept them, yet amex are bound by the same interchange limits as Visa and Mastercard. How much of this is actually true and how much is "well it was true 30 years ago and I've not questioned it" > You don't need a "technofix" for that, you need regulations that cap interchange fees like the EU. Agreed. And using crypto to limit network fees is a terrible idea. I just had a quick look and the current gas fee for ethereum is $20! [0] https://www.mastercard.us/content/dam/public/mastercardcom/na/us/en/documents/merchant-rates-2021-2022-apr-2021.pdf https://www.mastercard.us/content/dam/public/mastercardcom/n...

hocuspocus 4y ago

> I'm grumpy about Visa/MC taking 3% of every transaction They don't. Scheme fees in a 4-party payment network are the smallest part of the net fee, around 0.1-0.2%. > I want a technofix for that. And you'll never get one. Moving money between bank accounts in an immutable way is extremely cheap already. But that isn't what people want. If you want to lower card payment fees you need to introduce regulations that cap the interchange and prevent fraud, it's purely a political fix.

mattdesl 4y ago
> Moving money between bank accounts in an immutable way is extremely cheap already. Only true in certain countries, between certain banks/processors, and within certain thresholds. My last last transaction fee on Tezos was a fixed cost of 0.000544 xtz ($0.00177 USD), had no threshold limitations, required zero privacy invasion, settled in ~30 seconds, and was not limited to a particular bank or regional currency. This is essentially the 'technofix' that crypto users want to see adopted by the rest of the financial sector.
- hocuspocus 4y ago
  And they won't, because once again, regulatory problems don't have technological solutions.
  - mattdesl 4y ago
    The achievements I listed cannot only be solved with regulation.

pid-1 4y ago

If you think about blockchain fundamentals, they will always be expensive. How does a global network of peers can have transactions verified by majorities while being cheap? Basically you could say crypto fees are the price you pay for not trusting anyone. Using crypto is only a good alternative if you live in a society so fucked up citizens can't trust any bit of the contingent financial system.

lukeramsden 4y ago
In the most abstract sense, with a blockchain you’re paying for the _consensus_, not the _computation_ to handle transactions - and there are projects (such as Starkware) aimed at taking that to its logical conclusion, using computation proofs to reduce the cost of transactions by orders of magnitude.