4 ms·

A payment network nobody uses, which is why it’s cheap. The most important thing about a payment network are its network effects.

et-al 3y ago
Eh, I feel like with the JCB and UnionPay alliance, you have a better chance of using Discover abroad than American Express (not to mention AmEx's higher merchant fees).
- wkat4242 3y ago
  Those fees are the reason merchants in EU don't want to take amex. I hate my work for saddling me with an Amex company card (in my name) and requiring I pay all my business expenses with it. In Eastern Europe and even Paris (taxis!) they will laugh in your face or at the very least the machine is suddenly "broken". At least give me a card that actually works.
ta1243 3y ago
> The most important thing about a payment network are its network effects. Quite Visa 500b Mastercard 380b Amex 115b
- lxgr 3y ago
  What does revenue have to do with network effects? On the contrary, if Apple wants instant and almost ubiquitous merchant acceptance, it would make much more sense to buy a low-volume but wide-reach network than one that's generating lots of revenue from fees, simply because it would be much more capital intensive to finance.
  - ta1243 3y ago
    Nobody takes discover, as evidenced from their market price of 1/20th of that of Visa.
    - lxgr 3y ago
      What market are you talking about? I know a single store in NYC that accepts (credit) cards but not Discover. And as explained above, market price is an extremely poor proxy for network reach. Economic success as a payment network takes more than just reach; it’s necessary, but not sufficient.
snazz 3y ago
It's pretty widespread in the US. Looks like a tiny fraction more merchants accept Discover than Amex (according to https://wallethub.com/answers/cc/american-express-vs-discover-2140663734/ https://wallethub.com/answers/cc/american-express-vs-discove...). But acceptance is definitely poor outside the US compared to Visa and Mastercard.
- tavavex 3y ago
  Yes, this is definitely it. Even in Canada, one of the more similar markets to the US, Discover seems to be extremely sparsely used - not even talking about the rest of the world. On the other hand, Visa and Mastercard can be used essentially everywhere - they're ubiquitous.
lxgr 3y ago
To a newcomer wanting to establish themselves, volume is irrelevant, reach is everything, and Discover is accepted pretty much everywhere in the US that takes cards at all. Abroad, they have "roaming" agreements with many other large networks such as JCB, China UnionPay, and Diners Club.
bombcar 3y ago
Is Apple Pay a separate payment network or does it piggyback on Mastercard? It requires special software on the PoS terminals.
- snazz 3y ago
  As far as I understand, Apple Pay can be used with any EMV contactless card reader and it works with all four major card networks (perhaps more outside the US). From the merchant's perspective, it's the same as someone tapping their physical Visa/Mastercard/Discover/Amex at the terminal.
tomjen3 3y ago
Apple is pretty good at creating network effects.

et-al 3y ago

Eh, I feel like with the JCB and UnionPay alliance, you have a better chance of using Discover abroad than American Express (not to mention AmEx's higher merchant fees).

wkat4242 3y ago
Those fees are the reason merchants in EU don't want to take amex. I hate my work for saddling me with an Amex company card (in my name) and requiring I pay all my business expenses with it. In Eastern Europe and even Paris (taxis!) they will laugh in your face or at the very least the machine is suddenly "broken". At least give me a card that actually works.

ta1243 3y ago

> The most important thing about a payment network are its network effects. Quite Visa 500b Mastercard 380b Amex 115b

lxgr 3y ago
What does revenue have to do with network effects? On the contrary, if Apple wants instant and almost ubiquitous merchant acceptance, it would make much more sense to buy a low-volume but wide-reach network than one that's generating lots of revenue from fees, simply because it would be much more capital intensive to finance.
- ta1243 3y ago
  Nobody takes discover, as evidenced from their market price of 1/20th of that of Visa.
  - lxgr 3y ago
    What market are you talking about? I know a single store in NYC that accepts (credit) cards but not Discover. And as explained above, market price is an extremely poor proxy for network reach. Economic success as a payment network takes more than just reach; it’s necessary, but not sufficient.

snazz 3y ago

It's pretty widespread in the US. Looks like a tiny fraction more merchants accept Discover than Amex (according to https://wallethub.com/answers/cc/american-express-vs-discover-2140663734/ https://wallethub.com/answers/cc/american-express-vs-discove...). But acceptance is definitely poor outside the US compared to Visa and Mastercard.

tavavex 3y ago
Yes, this is definitely it. Even in Canada, one of the more similar markets to the US, Discover seems to be extremely sparsely used - not even talking about the rest of the world. On the other hand, Visa and Mastercard can be used essentially everywhere - they're ubiquitous.

lxgr 3y ago

To a newcomer wanting to establish themselves, volume is irrelevant, reach is everything, and Discover is accepted pretty much everywhere in the US that takes cards at all. Abroad, they have "roaming" agreements with many other large networks such as JCB, China UnionPay, and Diners Club.

bombcar 3y ago

Is Apple Pay a separate payment network or does it piggyback on Mastercard? It requires special software on the PoS terminals.

snazz 3y ago
As far as I understand, Apple Pay can be used with any EMV contactless card reader and it works with all four major card networks (perhaps more outside the US). From the merchant's perspective, it's the same as someone tapping their physical Visa/Mastercard/Discover/Amex at the terminal.

tomjen3 3y ago

Apple is pretty good at creating network effects.