8 ms·

Sounds like the real villains are the credit card companies who have the market power to enforce fees on cancelled payments. They are so entrenched no one is e

• pcarolan 4y ago
  In Australia, this is regulated and they can charge no more than 1.5%. https://www.accc.gov.au/consumers/pricing/card-surcharges https://www.accc.gov.au/consumers/pricing/card-surcharges This could be changed overnight with 1 piece of legislation.
  • SQueeeeeL 4y ago
    The American system is too deeply tied to capital to have a policy that actually helps citizens and small businesses get passed. The second a government official proposed something like this, the espionage arms of the credit card corporations would come down so hard on them and arrange for them to fail their next appointment (through "lobbying")
    • unglaublich 4y ago
      CC companies are genius. They charge companies 3% -> companies embed that 3% in their prices -> customers get a 1% refund from CC companies. - If you do NOT use a CC, you effectively pay _more for CC users_ (3%!). - CC companies make the customer feel like they have a benefit, while in fact, they are net payers too (2%). - They have access to all (private) data of the customer, which is extremely powerful in this age and time.
      • mihaic 4y ago
        I honestly have no idea how the hell the US public is still deluding itself to not make this illegal. Are the only ones that get it so content with their 1-2% pieces of silver that they're fine in trading the wellbeing of the less fortunate?
        • fallingknife 4y ago
          On the one hand, 3% cc fees are much higher than what would be set by a competitive market and are only possible with an oligopoly. On the other hand, the convenience that they allow for not carrying cash is often worth more than the 3% to consumers/merchants like me. E.g. any online payment. So while it's massively overpriced, it's still a win win usually, and I think that's probably why people aren't madder about it.
          • unglaublich 4y ago
            Yeah, the convenience of having drinkable tap water is also worth >3% of your net income. But luckily, because of competitive markets, it's often <0.1% of your income.
            • Oxidation 4y ago
              Isn't water one is the canonical examples of a natural monopoly?
            • mixdup 4y ago
              what city in the US has a competitive water distribution system?
          • onetokeoverthe 4y ago
            [dead]
        • cwkoss 4y ago
          You say "only" as if this isn't the majority of the american bourgeoisie. Pretty much all of finance, Landlords, IP trolling - the rich will unashamedly collect undeserved rent on anything they can up to and slightly over the line of the law.
        • thayne 4y ago
          It's a prisoner's dilemma. If we collectively switched to a payment system with lower transaction costs, we would all be better off. But as an individual, it is in your best interest to use the credit card with the highest rewards program, because you have to pay that extra 3% either way.
      • bwy 4y ago
        You've articulated the exact sentiment that I have to others before. What can we do about it? Is trying to out-lobby i.e. regulate the CC companies the only way? I noticed that other countries don't seem to have this problem.
        • arcastroe 4y ago
          What prevents a new credit card company coming in and competing with a 2% transaction fee and undercutting visa/square? Is it barrier to entry? Or would such hypothesized credit card company eventually cave to greed once they got big enough and move to 3% fees?
      • thayne 4y ago
        Evil genius
    • hash872 4y ago
      Debit card interchange fees have been regulated (aka price controls) in the US since at least 2011 https://sgp.fas.org/crs/misc/R41913.pdf https://sgp.fas.org/crs/misc/R41913.pdf
  • AussieWog93 4y ago
    That article is about businesses charging excessive surcharges to customers (e.g. Jetstar back in the day charging 5% extra for Visa/MasterCard, when it only cost them 0.7%). There are no laws against high processing fees; Afterpay takes around 8% for example.
    • closewith 4y ago
      There is in the EU, at least: > Specifically, the regulation: > * caps interchange fees at 0.2% of the transaction value for consumer debit cards and at 0.3% for consumer credit cards; From https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-card-based-payments.html https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-... No cap on corporate cards, though.
    • DanHulton 4y ago
      That, too, could be solved with 1 piece of legislation.
    • shakna 4y ago
      There are, and both Visa [0] and MasterCard [1] have both recently been in trouble for it. Instead of it being a specific maximum, however, it must be "reasonable" and allow for competition. The network also chooses the cheapest routing, by default. [0] https://www.accc.gov.au/media-release/visa-undertakes-to-address-competition-concerns-over-debit-card-payments https://www.accc.gov.au/media-release/visa-undertakes-to-add... [1] https://www.accc.gov.au/media-release/mastercard-in-court-for-alleged-misuse-of-market-power-over-card-payments https://www.accc.gov.au/media-release/mastercard-in-court-fo...
  • ThePowerOfFuet 4y ago
    In the EU, those caps are 0.2% for debit cards and 0.3% for credit cards.
• dangerboysteve 4y ago
  In my wife's small biz, she was paying between 1.8 to 2.2% for Visa and MC and 2.8% for Amex for in person. The 2.2% dealt with rewards cards.
• deleted 4y ago
  [deleted]
• theFletch 4y ago
  A lot of local shops near me pass the processing fees to their customers. Usually with a small sign at the register that says 3% added for credit card payments.
  • deleted 4y ago
    [deleted]
• themaninthedark 4y ago
  Cash still works and if you can get enough people to go back to using it then credit cards will have to change or be more ripe for disruption.
  • amethyst 4y ago
    The convenience of credit cards — and customers' willingness to spend more when they are accepted — is worth more to retailers and customers than the processing fees. I for one never carry cash, and I will happily pay any extra transaction fees from local businesses for the opportunity to reduce the size of my wallet, the cost/risk of casual theft, and the need to queue at an ATM for cash as part of my daily life.
    • massysett 4y ago
      Debit offers most of these benefits though, at much lower expense. I use credit because with the rebates it’s rational for me. If retailers offered a sufficient cash discount to wipe out the 1% rebate, I would move most of my volume to debit or even to direct debit. An example is my cell phone bill. Verizon offers such a huge discount for direct debit that I do it. Otherwise I would certainly use credit.
      • brewdad 4y ago
        My kid's university housing bill accepts credit card payments with no added fees, so I get my 2% back on that. The tuition bill can be paid by credit card but they tack on a 4% fee, so tuition gets paid by check. Rinse, repeat with most vendors.
      • amethyst 4y ago
        Except with debit the risk is now back on me to make sure my PIN doesn't get stolen/skimmed/whatever. Transactions are less convenient than a single tap, and (at least in the US) requires paying attention to see if places even support debit. Ironically, many smaller shops don't support it, even though it would theoretically be cheaper per-transaction, because the up-front costs and hurders are higher than a Square account.
• remram 4y ago
  France has its own payment network, CB (previously Carte Bleu). Payment cards emitted by French banks are usually both CB and Visa, which allows French banks to route payments through CB rather than Visa. This could probably be done by other groups, national or otherwise, with little effect on users. https://fr.m.wikipedia.org/wiki/Groupement_des_cartes_bancaires_CB https://fr.m.wikipedia.org/wiki/Groupement_des_cartes_bancai...
• randomdata 4y ago
  Seems to me that the real villain is the network interchange companies. The credit companies which use said networks are numerous and are in reasonable competition with each other, continually eroding their share of the transaction fee to provide more and more compelling 'rewards' to their customers. Once upon a time people dreamed that blockchain would provide the network, operating in a distributed fashion that isn't dependent on one or two companies, and bet big on it becoming that, but obviously that didn't pan out.
• patmcc 4y ago
  From a user perspective, I get a lot of benefit from credit cards. I get cash back, an interest-free advance, the ability to do chargebacks, very low liability for lost/stolen cards, etc. If I got 1% or 2% lower prices, would I give all that up? I doubt it.
  • jjeaff 4y ago
    I get 2% cash back on all my purchases. So they are going to have to drop prices by more than that. And I also get the protection of the cc company if my card info is stolen or a company doesn't deliver what they promised.
  • cwkoss 4y ago
    Cashback on credit cards is really just a rebate on the CC fees that are baked in to all prices. It's still a net economic loss for consumers, just not as bad as if you weren't taking advantage of that. Credit cards only seem like a good deal to consumers because it is hard to reason about n-th order economic effects. The profits these companies make are ultimately coming from all of our wallets.
    • patmcc 4y ago
      It's a net economic loss for consumers as a class, sure. That doesn't mean it's a loss for each individual consumer. I'm not against lowering CC fees. But the idea that they're just rent seeking is very silly.
      • cwkoss 4y ago
        Yeah, I'm aware of "churning". AFAIK its only possible to beat the system by taking advantage of many temporary offers in series and distorting your spending to get the 'free' value offered by their featured partners. i.e. you can only beat the system to the extent that you value airline miles and gift cards as their cash equivalents.
        • patmcc 4y ago
• rileymat2 4y ago
  I don't know enough about the topic to analyze whether 3% is high or low, but I don't think it makes sense for them to refund the fee in the case of refunds. They have provided the same service, same costs. So I would hardly call them villains for that aspect.
  • Marsymars 4y ago
    If your baseline is “same service, same costs”, then the fees from Visa/MC should be a fixed amount rather than a %.
• SoftTalker 4y ago
  I don’t know if it’s worth 3% but the convenience of not having to have and handle cash is worth something, for both buyers and merchants.
  • PragmaticPulp 4y ago
    If a business doesn’t accept credit cards, they’re going to lose a lot more than 3% in lost transactions.
    • thatguy0900 4y ago
      Depends on the business. The Barbershop I go to is cash only, doesn't take reservations, and has always had a 30+ minute wait. I assume the uhh.. tax flexibility of cash payments is worth a lot
      • CryptoBanker 4y ago
        Thank you for your anecdata
• paulmd 4y ago
  Visa and Mastercard typically only keep the fixed fees on refunded charges, the $0.30 part of the typical "$0.30 + 3%" fee structure. Square is saying they'll keep the whole 3%. That's obviously different and not Visa/Mastercard's fault - Visa is refunding it to Square, Square is keeping it. Stripe is now doing the same thing too. The fixed cost is the processing fee and that cost includes processing refunds. The percentage is the "interchange fee" and is supposed to represent the agreed take of the processing network for that settled transaction. https://www.businessnewsdaily.com/16583-credit-card-processing-costs-fees-explained.html https://www.businessnewsdaily.com/16583-credit-card-processi...
• georgeplusplus 4y ago
  They provide a service and they charge for that service. What part about this is so villainous? I agree that is not a consumer friendly situation but on the grounds that it because its effectively a duopoly and not because they charge for a service they provide. These monopolies never benefit the consumer. The best ways to approach this are 1. the government to break up the duopoly, 2. a competitor to come along to introduce more competition, or 3. the consumer can get fed up and go back to using cash or carry a laptop around to transfer bitcoin until said companies are forced to break up and consolidate to a better product. These solutions are tried and true. I am tired of hearing people complain about a service and still continue to use the service.
• awill 4y ago
  and yet Apple/Google/Valve can take 30% :)