4 ms·

I actually agree with this change, creditcards in the 2020s is just racketeering. Why? Because afaik almost all transactions are digital now, and they charge an

I actually agree with this change, creditcards in the 2020s is just racketeering. Why? Because afaik almost all transactions are digital now, and they charge an absurd rake for every transaction they process. A 3% transaction fee seems like little until you realize the profit margin is only 6% ... why should they get 50% of the spoils? Companies like Amzn, costco, HEB, and now cell carriers are all moving towards their own cards which allows them to greatly reduce the fees incurred. CC fees and corruption is one argument in favor of CBDC. (granted there are plenty of reasons against)

gumby 3y ago
The credit card gives me protection from overcharging and other shenanigans that a bank draft does not.
- yomlica8 3y ago
  Yeah, I don't like any 'pull' bill payment at all. I know exactly why they do it. It is a lot harder to get the money back after the screw you than it is to bail on a changed deal.
kevincox 3y ago
I completely agree. The cost of credit cards should be passed to the consumer. Right now everything I buy is effectively 3-5% more expensive to cover the credit card fees. (Ok, maybe only 1-3% because handing cash costs money too, but that doesn't change the big picture.) However if I want to oppose this I need to stop using my credit card, but my credit card gives me 2% back. So if I chose not to participate I lose money.
paxys 3y ago
So if their problem is with credit cards can I pay them cash instead? Or mail a check? Enter a prepaid debit card? Do a wire transfer? Do they accept Venmo/Zelle/Cashapp/Paypal? Bitcoin? Nope, they want to charge the same fee for using literally any of these methods. What they really want is to get your bank account number so they can charge you whatever they want and you have no way to dispute it.
- kylehotchkiss 3y ago
  AT&T bills me a different amount every single month: I am not using a new service or feature, their massive billing software just can’t keep it consistent. Of course ACH is appealing to them for this - I can’t complain about the amount debited then.
  - Sylamore 3y ago
    AT&T's billing system (Telegence) is so convoluted, even their own staff can't tell you what your month to month charges will be, it's why they only give you an estimate when you sign up for a new line.
- iAMkenough 3y ago
  I pay my monthly bill in cash at the Verizon store that’s on my way to work.
- maerF0x0 3y ago
  Whats to stop a bank offering an account that you only put enough money in so they cannot draw more than you have? Kind of like Capital One's virtual card numbers which allow you to have a throwaway number per account.
  - diyftw 3y ago
    This exists for incoming ACH transfers, and it is called a UPIC account. It is used so that a company can give out their account info to customers, but the bank will deny any third-party withdrawals. The money is directly transferred into the company's "real" bank account.
  - beardedmoose 3y ago
    Tangent on this, The virtual cards sound great on paper but in practice if you get a compromised virtual card number you still have to cancel your main CC and start over which is stupid IMO. They told me since the virtual card number was tied to the CC you still have to change both which negates the benefits of having the virtual card numbers in the first place.
no_wizard 3y ago
Costco has always had their own card. Before that, they didn't even accept credit cards so they didn't have to pay processing fees. My understanding at this point is that Costco actually made AMEX and Visa bid for the business, they actually make money every time their branded card is swiped and they pay Visa dramatically less for general processing fees than other retailers
jabroni_salad 3y ago
I actually think we are on the cusp of the financial equivalent of the 'we no longer support internet explorer' google banner, targeting visa and mastercard. Basically every merchant from panhandlers with square readers to Walmart wants to reduce their interchange fees. Fednow hasn't exactly caught like wildfire like Pix or the india thing whose name I forgot, but it only has to do it once and it can still happen. I think once Walmart and Kroger start to push harder on it and the Request for Payment feature is avaialble, we will see big adoption.
- ianburrell 3y ago
  FedNow can't yet do requested payments. It is currently only push. I don't think it will ever have pull payments like ACH. Which means the current flow requires finding the account for recipient and put in transfer for the right amount. I heard they are working on requests, and might be possible to whitelist people to pay automatically. FedNow was only just released, it is going to take time to add support. My bank doesn't support it yet.
  - iancarroll 3y ago
    I’m pretty sure FedNow launched with RFP support.
- deleted 3y ago
  [deleted]
- toomuchtodo 3y ago
  I’m at a FinTech and some of the merchants we’re in the same orbit with are actively moving to replace credit and debit card payments with FedNow instant payments. One is paying almost $6M/year in debit and CC interchange fees, so they are highly incentivized. Personally, moving money between Wise and Chase bank instantly was magic the first time it happened. Finally felt like I lived in a developed country.
  - hnburnsy 3y ago
    I have wondered if FedNow is going to hurt the credit card industry. At least I hope it brings some competition.
Roark66 3y ago
Me too. Here in Europe credit cards are a lot less popular for daily use. Most people I know have debit cards for in person shopping. Prepaid debit for Internet shopping or they use alternative payment methods (blik, fast transfers etc). That's why I found it so annoying certain "global" companies like Google insist people pay for some of their services with a credit card or an account linked debit card(no prepaid cards). I don't see what benefit they get from forcing people to open a separate account. If there is no money in that account they will not be able to take a payment. It's exactly like a prepaid card(assuming you disable overdraft). So why don't they accept prepaid? To piss people off I guess.
- helf 3y ago
  [dead]
- WirelessGigabit 3y ago
  When I pay with a credit card I get a couple of things: 1) Item not delivered / broken / service not what I ordered => dispute. 2) Shop hacked and 2 months later charges my credit card $20,000? The charge hits and I dispute it, but the money is not gone out of my account. Can you imagine them hitting my debit account?
  - jtbayly 3y ago
    I can. I’ve had it happen. That’s why I don’t use debit cards anymore. The fees “I” racked up were terrible because of bounced checks missed CC payments and so forth.
  - hakfoo 3y ago
    I wonder if to an extent, the US tendency to use credit card "protections" is an outsourcing of consumer-protection law. Some countries, I gather that the consumer-protection authorities have a lot of teeth, and they're a viable way to escalate on a lot of bad behaviour (denying return of defective goods, or refusing to honour warranty). In the US, I don't think this is as common-- you might be able to raise an issue with your state Attorney General, and in 2029 he'll get to it-- so the magic word is "chargeback" to get a response.

gumby 3y ago

The credit card gives me protection from overcharging and other shenanigans that a bank draft does not.

yomlica8 3y ago
Yeah, I don't like any 'pull' bill payment at all. I know exactly why they do it. It is a lot harder to get the money back after the screw you than it is to bail on a changed deal.

kevincox 3y ago

I completely agree. The cost of credit cards should be passed to the consumer. Right now everything I buy is effectively 3-5% more expensive to cover the credit card fees. (Ok, maybe only 1-3% because handing cash costs money too, but that doesn't change the big picture.) However if I want to oppose this I need to stop using my credit card, but my credit card gives me 2% back. So if I chose not to participate I lose money.

paxys 3y ago

So if their problem is with credit cards can I pay them cash instead? Or mail a check? Enter a prepaid debit card? Do a wire transfer? Do they accept Venmo/Zelle/Cashapp/Paypal? Bitcoin? Nope, they want to charge the same fee for using literally any of these methods. What they really want is to get your bank account number so they can charge you whatever they want and you have no way to dispute it.

kylehotchkiss 3y ago
AT&T bills me a different amount every single month: I am not using a new service or feature, their massive billing software just can’t keep it consistent. Of course ACH is appealing to them for this - I can’t complain about the amount debited then.
- Sylamore 3y ago
  AT&T's billing system (Telegence) is so convoluted, even their own staff can't tell you what your month to month charges will be, it's why they only give you an estimate when you sign up for a new line.
iAMkenough 3y ago
I pay my monthly bill in cash at the Verizon store that’s on my way to work.
maerF0x0 3y ago
Whats to stop a bank offering an account that you only put enough money in so they cannot draw more than you have? Kind of like Capital One's virtual card numbers which allow you to have a throwaway number per account.
- diyftw 3y ago
  This exists for incoming ACH transfers, and it is called a UPIC account. It is used so that a company can give out their account info to customers, but the bank will deny any third-party withdrawals. The money is directly transferred into the company's "real" bank account.
- beardedmoose 3y ago
  Tangent on this, The virtual cards sound great on paper but in practice if you get a compromised virtual card number you still have to cancel your main CC and start over which is stupid IMO. They told me since the virtual card number was tied to the CC you still have to change both which negates the benefits of having the virtual card numbers in the first place.

no_wizard 3y ago

Costco has always had their own card. Before that, they didn't even accept credit cards so they didn't have to pay processing fees. My understanding at this point is that Costco actually made AMEX and Visa bid for the business, they actually make money every time their branded card is swiped and they pay Visa dramatically less for general processing fees than other retailers

jabroni_salad 3y ago

I actually think we are on the cusp of the financial equivalent of the 'we no longer support internet explorer' google banner, targeting visa and mastercard. Basically every merchant from panhandlers with square readers to Walmart wants to reduce their interchange fees. Fednow hasn't exactly caught like wildfire like Pix or the india thing whose name I forgot, but it only has to do it once and it can still happen. I think once Walmart and Kroger start to push harder on it and the Request for Payment feature is avaialble, we will see big adoption.

ianburrell 3y ago
FedNow can't yet do requested payments. It is currently only push. I don't think it will ever have pull payments like ACH. Which means the current flow requires finding the account for recipient and put in transfer for the right amount. I heard they are working on requests, and might be possible to whitelist people to pay automatically. FedNow was only just released, it is going to take time to add support. My bank doesn't support it yet.
- iancarroll 3y ago
  I’m pretty sure FedNow launched with RFP support.
deleted 3y ago
[deleted]
toomuchtodo 3y ago
I’m at a FinTech and some of the merchants we’re in the same orbit with are actively moving to replace credit and debit card payments with FedNow instant payments. One is paying almost $6M/year in debit and CC interchange fees, so they are highly incentivized. Personally, moving money between Wise and Chase bank instantly was magic the first time it happened. Finally felt like I lived in a developed country.
- hnburnsy 3y ago
  I have wondered if FedNow is going to hurt the credit card industry. At least I hope it brings some competition.

Roark66 3y ago

Me too. Here in Europe credit cards are a lot less popular for daily use. Most people I know have debit cards for in person shopping. Prepaid debit for Internet shopping or they use alternative payment methods (blik, fast transfers etc). That's why I found it so annoying certain "global" companies like Google insist people pay for some of their services with a credit card or an account linked debit card(no prepaid cards). I don't see what benefit they get from forcing people to open a separate account. If there is no money in that account they will not be able to take a payment. It's exactly like a prepaid card(assuming you disable overdraft). So why don't they accept prepaid? To piss people off I guess.

helf 3y ago
[dead]
WirelessGigabit 3y ago
When I pay with a credit card I get a couple of things: 1) Item not delivered / broken / service not what I ordered => dispute. 2) Shop hacked and 2 months later charges my credit card $20,000? The charge hits and I dispute it, but the money is not gone out of my account. Can you imagine them hitting my debit account?
- jtbayly 3y ago
  I can. I’ve had it happen. That’s why I don’t use debit cards anymore. The fees “I” racked up were terrible because of bounced checks missed CC payments and so forth.
- hakfoo 3y ago
  I wonder if to an extent, the US tendency to use credit card "protections" is an outsourcing of consumer-protection law. Some countries, I gather that the consumer-protection authorities have a lot of teeth, and they're a viable way to escalate on a lot of bad behaviour (denying return of defective goods, or refusing to honour warranty). In the US, I don't think this is as common-- you might be able to raise an issue with your state Attorney General, and in 2029 he'll get to it-- so the magic word is "chargeback" to get a response.