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> “Take that!”, those of you saying 2% to 3% is a small price to pay for security, fraud, and payment risk mitigation. 2% for that service is worth it 100% and
by Guvante 3y ago
> “Take that!”, those of you saying 2% to 3% is a small price to pay for security, fraud, and payment risk mitigation.
2% for that service is worth it 100% and anyone who disagrees doesn't understand the math. 3% is probably too.
The problem is Visa et Al don't provide that. They provide it to consumers my demanding it from companies.
Hell even when the companies don't fit the bill sometimes the banks do instead.
But never does Visa pay.
- lxgr 3y agoIf you think that 2% are going to that service, it's you who doesn't understand the math/economics. Out of, let's call it 3% of blended-rate merchant fees for simplicity, about 2% goes directly to the issuing bank, who (at least in the US) passes on 1-2% to the cardholder in the form of "rewards". The fact that issuers can do this shows that card payments are priced extremely inefficiently. That alone is quite ridiculous and has no bearing on the overall efficiency of Visa and Mastercard as global payment systems. In the EU, interchange was recently capped at 0.3% for credit cards (i.e. at 1/10th of the US value), and most stakeholders have come out alive – the only thing that went away were these ridiculous rewards schemes, which effectively constitute a tax on people with poor credit and/or financial literacy. The marginal cost of providing secure online payments probably lies somewhere well in the sub-1% region for domestic payments and a bit more when foreign exchange is involved.