5 ms·

A bunch of fintechs are going to die :(

lajupechere 3y ago
A bunch of fintechs are going to die :)
arcticbull 3y ago
Fintechs seem to do just fine in Europe, so I would suggest this is a pretty myopic take. Have you seen Adyen (Dutch, $ADYEY)? PayPal? Like it or not those companies provide value to their merchants so they're able to charge for their services. That isn't going to change with lower interchange.
- KRAKRISMOTT 3y ago
  They are low level infra companies that exist because of regulatory capture. I am referring to companies like X1 and to some extent Ramp. The high level fintechs driving consumer innovation like electronic wallets, interesting rebate card models, better banking UXes all require interchange fees. This is also why most consumer fintechs start in the US and UK first before expanding elsewhere.
  - arcticbull 3y ago
    I guess I would flip that around and say that the fintechs are providing services that are worth paying the mark-up for - not the other way around.
  - Symbiote 3y ago
    The UK was part of the EU until recently, and still maintains the card transaction fee cap regulation.
    - rjmunro 3y ago
      No it doesn't. It was one of the first "Brexit freedoms" the government took advantage of. That's why Amazon had a spat with Visa: https://ca.news.yahoo.com/visa-mastercard-agree-lower-average-193615680.html https://ca.news.yahoo.com/visa-mastercard-agree-lower-averag... The article is wrong here.
      - arcticbull 3y ago
        Interchange in the UK remains capped at the same 0.2% for debit and 0.3% for credit rate that applied in the EEA prior to Brexit. What changed was that this cap only applies when the issuer, acquirer and merchant are within the UK. Therefore, UK-EEA transactions are no longer covered. [1] [1] https://www.barclaycard.co.uk/content/dam/barclaycard/documents/business/help-and-support/interchange-rates-and-scheme-fee-guide.pdf https://www.barclaycard.co.uk/content/dam/barclaycard/docume...
      - erincandescent 3y ago
        The UK didn't scrap the Interchange Fees Regulation; but as a matter of law there became two separate IFRs, one covering the EEA-cards-in-EEA and one covering UK-cards-in-UK (To put it bluntly, a big amendment was automatically applied to most UK laws on exit day replacing EU & EEA with UK; and of course in the EU the definition of both of those words changed)
        rjmunro 3y ago
        So why did Amazon threaten to stop taking Visa cards? Do they not have a UK bank account?
- codetrotter 3y ago
  > Adyen (Dutch, $ADYEY) I never realised Adyen was Dutch. The name had me thinking they were from a country in Asia!

A bunch of fintechs are going to die :)

Fintechs seem to do just fine in Europe, so I would suggest this is a pretty myopic take. Have you seen Adyen (Dutch, $ADYEY)? PayPal? Like it or not those companies provide value to their merchants so they're able to charge for their services. That isn't going to change with lower interchange.

KRAKRISMOTT 3y ago
They are low level infra companies that exist because of regulatory capture. I am referring to companies like X1 and to some extent Ramp. The high level fintechs driving consumer innovation like electronic wallets, interesting rebate card models, better banking UXes all require interchange fees. This is also why most consumer fintechs start in the US and UK first before expanding elsewhere.
- arcticbull 3y ago
  I guess I would flip that around and say that the fintechs are providing services that are worth paying the mark-up for - not the other way around.
- Symbiote 3y ago
  The UK was part of the EU until recently, and still maintains the card transaction fee cap regulation.
  - rjmunro 3y ago
    No it doesn't. It was one of the first "Brexit freedoms" the government took advantage of. That's why Amazon had a spat with Visa: https://ca.news.yahoo.com/visa-mastercard-agree-lower-average-193615680.html https://ca.news.yahoo.com/visa-mastercard-agree-lower-averag... The article is wrong here.
    - arcticbull 3y ago
      Interchange in the UK remains capped at the same 0.2% for debit and 0.3% for credit rate that applied in the EEA prior to Brexit. What changed was that this cap only applies when the issuer, acquirer and merchant are within the UK. Therefore, UK-EEA transactions are no longer covered. [1] [1] https://www.barclaycard.co.uk/content/dam/barclaycard/documents/business/help-and-support/interchange-rates-and-scheme-fee-guide.pdf https://www.barclaycard.co.uk/content/dam/barclaycard/docume...
    - erincandescent 3y ago
      The UK didn't scrap the Interchange Fees Regulation; but as a matter of law there became two separate IFRs, one covering the EEA-cards-in-EEA and one covering UK-cards-in-UK (To put it bluntly, a big amendment was automatically applied to most UK laws on exit day replacing EU & EEA with UK; and of course in the EU the definition of both of those words changed)
      - rjmunro 3y ago
        So why did Amazon threaten to stop taking Visa cards? Do they not have a UK bank account?
codetrotter 3y ago
> Adyen (Dutch, $ADYEY) I never realised Adyen was Dutch. The name had me thinking they were from a country in Asia!