6 ms·

But what is the value they provide, which justifies their earnings and therefore market cap?

• fragmede 4y ago
  by being the digital rails. without visa/mc, all you have in your wallet is a piece of useless plastic. there's huge value in the convenience of not having to use cash, and then the rewards programs on top of that.
  • treis 4y ago
    Sure but that's not why Visa/MC are worth that much. They're worth that much because they're a duopoly that can dictate prices.
    • mbesto 4y ago
      > that can dictate prices Prices that are capped by the government: The Fed’s 2011 rules capped fees at 21 cents plus five basis points of each transaction, and also allowed an additional one cent fee per transaction for fraud prevention, where applicable.[0] [0] - https://news.bloomberglaw.com/antitrust/biden-takes-on-visa-mastercard-over-debit-card-fees-explained https://news.bloomberglaw.com/antitrust/biden-takes-on-visa-...
      • treis 4y ago
        That's for debit cards only. Which Visa/MC have knee capped with their monopoly power so it doesn't really matter. Actually helps as a distraction
      • mtmail 4y ago
        Also capped in Europe https://www.adyen.com/en_GB/blog/all-you-need-to-know-about-the-eu-interchange-cap https://www.adyen.com/en_GB/blog/all-you-need-to-know-about-... (credit and debit). But I see that as acknowledgement the companies are too large and duopoly.