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I wish stripe or some company would create a zero fee credit card that is truly equivalent to using cash. The wealth transfer from cash payers, merchants, and s

I wish stripe or some company would create a zero fee credit card that is truly equivalent to using cash. The wealth transfer from cash payers, merchants, and some card users to other card users and the cc companies is one of those gross injustices, a small and persistent leech on society. Surely there’s a way to do cc transactions for near zero? What is the point of all this tech otherwise?

smallmancontrov 3y ago
The leech is the point, there is no "otherwise."
ansible 3y ago
There's still fraud detection / prevention, card terminals, and other various infrastructure to pay for. Someone's going to pay for it, somehow. Also, suppose Stripe did offer a low / zero transaction cost card. What's the incentive for me (a customer) to get it? It isn't any better than the other no-monthly-fee CCs, and is strictly inferior to a rewards card. For merchants, yes, they are incentivized to accept Stripe's new card. But they can't stop accepting the other ones until Stripe has a significant share of the transactions. And may not be able to do so even then. And meanwhile Stripe is eating the cost of running this new zero fee card system, which effectively takes away money that they could invest in their own business. Sounds like a lose, lose, lose all around. The real solution is to have a law that caps the CC transaction fee. Or allow merchants to add a surcharge for rewards CCs.
melenaboija 3y ago
Agree but maintaining the infrastructure has a cost someone has to pay and I as a customer won’t see any benefit. I think it would be healthy to be able to have options with near zero cost but I guess this would only happen with strong regulations, which seems almost impossible in this space (in the US)
- klabb3 3y ago
  > Agree but maintaining the infrastructure has a cost someone has to pay The bank? Keeping money in your account allows the bank to take out credit. Providing digital payments sounds like a reasonable service for a bank to provide. As well as fraud prevention. This is how it works in Europe, most people have debit cards. The insanity is having to take out a loan you don’t need to prove that you’re responsible.
  - deleted 3y ago
    [deleted]
makeitdouble 3y ago
One side of this is cash isn't zero fee. It has to be minted and circulated, we see it as "free" but in practice the gov foots the bill. And, for cards it would be issuers footing the bill. Then moving cash isn't free either. Merchants handling a lot of cash also pay to get their cash moved, processed, exchanged etc. It's an aspect where card could be lower, but zero is also an impossoble goal.
knallfrosch 3y ago
Just ask your parliament to limit the fee? It's 0.3% for credit cards and 0.2% for debit cards in the European Union: https://www.consilium.europa.eu/en/press/press-releases/2015/04/20/capping-fees-card-based-payments/ https://www.consilium.europa.eu/en/press/press-releases/2015...
- rockostrich 3y ago
  They already started trying. The Credit Card Competition Act was introduced last year [1]. It doesn't explicitly limit interchange fees though. Instead it allows merchants to choose the payment network that payments go through which legislators hope would create a race to the bottom. [1] https://www.congress.gov/bill/118th-congress/senate-bill/1838/text https://www.congress.gov/bill/118th-congress/senate-bill/183...
phyphy 3y ago
We have something similar in India. [below text is from google search results] To facilitate the penetration and usage of RuPay Credit Cards on UPI, there will be no charge for transactions up to ₹2,000, an NPCI circular said. For transactions upwards of ₹2000, the applicable MDR amount will be borne by merchants and no additional charges will be levied upon the customers. Disadvantages of Rupay Cards Limited International Acceptance: One of the main disadvantages of RuPay cards is their limited acceptance outside of India. ... Restricted Usage: RuPay cards are primarily designed for domestic use within India.
dboreham 3y ago
Isn't that called a debit card?
- bombcar 3y ago
  I wonder why no bank offers a debit-network-processed card that is backed by a line of credit. Probably because there’s no money in it.
  - astura 3y ago
    >debit-network-processed card that is backed by a line of credit. Because then it wouldn't be a debit card? I assume that the debit-network is reserved for debit cards?
  - kevincox 3y ago
    What would be the appeal of this to the customer? It is basically a prisoners dilemma. It is globally optimal to stop rewarding people for using credit cards but for each individual they lose if they don't do it. This is why in the EU regulation was passed to stop this nonsense.
  - mdaniel 3y ago
    Fun fact: there are plenty of "credit card as a service" platforms nowadays so you could start one: https://www.getpliant.com/en/cards-as-a-service/ https://www.getpliant.com/en/cards-as-a-service/

smallmancontrov 3y ago

The leech is the point, there is no "otherwise."

ansible 3y ago

There's still fraud detection / prevention, card terminals, and other various infrastructure to pay for. Someone's going to pay for it, somehow. Also, suppose Stripe did offer a low / zero transaction cost card. What's the incentive for me (a customer) to get it? It isn't any better than the other no-monthly-fee CCs, and is strictly inferior to a rewards card. For merchants, yes, they are incentivized to accept Stripe's new card. But they can't stop accepting the other ones until Stripe has a significant share of the transactions. And may not be able to do so even then. And meanwhile Stripe is eating the cost of running this new zero fee card system, which effectively takes away money that they could invest in their own business. Sounds like a lose, lose, lose all around. The real solution is to have a law that caps the CC transaction fee. Or allow merchants to add a surcharge for rewards CCs.

melenaboija 3y ago

Agree but maintaining the infrastructure has a cost someone has to pay and I as a customer won’t see any benefit. I think it would be healthy to be able to have options with near zero cost but I guess this would only happen with strong regulations, which seems almost impossible in this space (in the US)

klabb3 3y ago
> Agree but maintaining the infrastructure has a cost someone has to pay The bank? Keeping money in your account allows the bank to take out credit. Providing digital payments sounds like a reasonable service for a bank to provide. As well as fraud prevention. This is how it works in Europe, most people have debit cards. The insanity is having to take out a loan you don’t need to prove that you’re responsible.
- deleted 3y ago
  [deleted]

makeitdouble 3y ago

One side of this is cash isn't zero fee. It has to be minted and circulated, we see it as "free" but in practice the gov foots the bill. And, for cards it would be issuers footing the bill. Then moving cash isn't free either. Merchants handling a lot of cash also pay to get their cash moved, processed, exchanged etc. It's an aspect where card could be lower, but zero is also an impossoble goal.

knallfrosch 3y ago

Just ask your parliament to limit the fee? It's 0.3% for credit cards and 0.2% for debit cards in the European Union: https://www.consilium.europa.eu/en/press/press-releases/2015/04/20/capping-fees-card-based-payments/ https://www.consilium.europa.eu/en/press/press-releases/2015...

rockostrich 3y ago
They already started trying. The Credit Card Competition Act was introduced last year [1]. It doesn't explicitly limit interchange fees though. Instead it allows merchants to choose the payment network that payments go through which legislators hope would create a race to the bottom. [1] https://www.congress.gov/bill/118th-congress/senate-bill/1838/text https://www.congress.gov/bill/118th-congress/senate-bill/183...

phyphy 3y ago

We have something similar in India. [below text is from google search results] To facilitate the penetration and usage of RuPay Credit Cards on UPI, there will be no charge for transactions up to ₹2,000, an NPCI circular said. For transactions upwards of ₹2000, the applicable MDR amount will be borne by merchants and no additional charges will be levied upon the customers. Disadvantages of Rupay Cards Limited International Acceptance: One of the main disadvantages of RuPay cards is their limited acceptance outside of India. ... Restricted Usage: RuPay cards are primarily designed for domestic use within India.

dboreham 3y ago

Isn't that called a debit card?

bombcar 3y ago
I wonder why no bank offers a debit-network-processed card that is backed by a line of credit. Probably because there’s no money in it.
- astura 3y ago
  >debit-network-processed card that is backed by a line of credit. Because then it wouldn't be a debit card? I assume that the debit-network is reserved for debit cards?
- kevincox 3y ago
  What would be the appeal of this to the customer? It is basically a prisoners dilemma. It is globally optimal to stop rewarding people for using credit cards but for each individual they lose if they don't do it. This is why in the EU regulation was passed to stop this nonsense.
- mdaniel 3y ago
  Fun fact: there are plenty of "credit card as a service" platforms nowadays so you could start one: https://www.getpliant.com/en/cards-as-a-service/ https://www.getpliant.com/en/cards-as-a-service/