5 ms·

That works out to ~$22 per American per year. Not sure what Visa's operating costs for their network are, and I'm no big fan of them (or any other credit card c

That works out to ~$22 per American per year. Not sure what Visa's operating costs for their network are, and I'm no big fan of them (or any other credit card company) but that's far cheaper than I would have expected given the convenience provided by almost never needing cash or checks. So as far as its impact on prices go, it doesn't sound like it's really a huge amount.

popcalc 2y ago
>far cheaper than I would have expected given the convenience provided by almost never needing cash or checks Is there no alternative system that succeeds in affording both convenience and low (even state-subsidized) costs?
egypturnash 2y ago
Visa acts as a censor, too. If you are making perfectly legal porn, for instance, then every few years you need to find a new way to take payment because your old one got big enough for Visa to notice it and say "hey no porn".
- ethbr1 2y ago
  This. Especially back in the 90s, it was disgusting how easily the US government leaned on the major payment networks and banks, absent any law or illegality, to disconnect the porn industry. Call me old fashioned, but if that's a thing you want to do in a democracy, there should be a legal basis passed through the legislative branch...
  - mrguyorama 2y ago
    >it was disgusting how easily the US government It was never the US government? It was always done by advocacy groups with good law firms suing Visa for _whatever_ until Visa """voluntarily""" censored porn payments.
    - ethbr1 2y ago
      The DOJ under Bush W absolutely prosecuted explicit pornography for political optics. (WARNING: Some pretty nasty stuff mentioned; text, not pictures) https://web.archive.org/web/20060321172250/http://www.thestranger.com/seattle/Content?oid=25246 https://web.archive.org/web/20060321172250/http://www.thestr... Primarily through leveraging the power of the AG to apply on-the-books obscenity laws to material which previously hadn't been targeted as such. When the courts took a dim view towards that, they decided they could get quicker wins by making it clear to Visa et al. that things would be uncomfortable if they didn't "voluntarily" choose to stop doing business with pornographic companies.
- MBCook 2y ago
  While I understand your point, doesn’t adult stuff also have very high rates of fraud and chargebacks? Even if a fair bit may have been correct but reported as fraud for personal reasons? Avoiding a category like that (or holding it to stricter standards) seems rather reasonable.
  - lxgr 2y ago
    Maybe so (I have no idea), but the risk of fraud and chargebacks is not borne by the network. There are many other high risk industries they don't seem to have a problem with.
    - quesera 2y ago
      Visa sets merchant policy, and they do not allow high chargeback rates. The merchant bears the brunt of the economic loss, but chargebacks are a relatively expensive hassle for the network too, and ultimately they will drop merchants who cannot keep chargebacks low. Around 0.5% is considered reasonable. Anywhere in the 1% area for more than a few months will get a merchant dropped.
- pkaye 2y ago
  Isn't that because of high chargeback rates?
candiddevmike 2y ago
That number seems really low. At least 1-2% of all my purchases have fees associated with them, that's way more than $22. Small businesses, especially with lower priced items are hit with .50 + % fees too. It all adds up.
ejstronge 2y ago
> That works out to ~$22 per American per year. Not sure what Visa's operating costs for their network are, and I'm no big fan of them (or any other credit card company) but that's far cheaper than I would have expected You’re assuming quite a few things - the most significant are that the cost is borne equally among Americans. Instead, many Americans use credit card networks instead of debit cards, and those who use debit cards may have no option to avoid the fees.
metaphor 2y ago
> Not sure what Visa's operating costs for their network are, and I'm no big fan of them (or any other credit card company) but that's far cheaper than I would have expected given the convenience provided by almost never needing cash or checks. Of the $32.653 billon in revenue Visa pulled in last year, 2.3% was network and processing opex, while 53% was pure bottom line profit[1]. Furthermore, squaring 17.9% tax provision line item: if your household had simple married-filing-jointly tax return with an AGI greater than ~$139.5k, you paid more in 2023 taxes than Visa...and that assumes you live in a state without income taxes. Think about that for a hot minute while recalibrating expectations. [1] https://www.sec.gov/Archives/edgar/data/1403161/000140316123000099/v-20230930.htm#ib8781c2034714c6298c4cf56c426b196_94 https://www.sec.gov/Archives/edgar/data/1403161/000140316123...
- s1artibartfast 2y ago
  What are we supposed to take away from a high the high profit? How much did visa pay in taxes? Less than a single 140k family? Why are we comparing corporate taxes and individual taxes? They are completely different.
  - NetOpWibby 2y ago
    Why do families pay less taxes than corporations? I'm not a money guy or a lawyer but that seems extremely *off*.
    - s1artibartfast 2y ago
      Because corporations pass profits on to individuals who also pay income taxes. It is a bogus comparison. Visa might "only" pay 17%, but if you are an owner, you are paying 17% and then another 20% on what's left.
      - NetOpWibby 2y ago
        Ahh, thanks for the clarification! The more I learn about how things actually work, the more irritated I get of the media for playing us.

popcalc 2y ago

>far cheaper than I would have expected given the convenience provided by almost never needing cash or checks Is there no alternative system that succeeds in affording both convenience and low (even state-subsidized) costs?

egypturnash 2y ago

Visa acts as a censor, too. If you are making perfectly legal porn, for instance, then every few years you need to find a new way to take payment because your old one got big enough for Visa to notice it and say "hey no porn".

ethbr1 2y ago
This. Especially back in the 90s, it was disgusting how easily the US government leaned on the major payment networks and banks, absent any law or illegality, to disconnect the porn industry. Call me old fashioned, but if that's a thing you want to do in a democracy, there should be a legal basis passed through the legislative branch...
- mrguyorama 2y ago
  >it was disgusting how easily the US government It was never the US government? It was always done by advocacy groups with good law firms suing Visa for _whatever_ until Visa """voluntarily""" censored porn payments.
  - ethbr1 2y ago
    The DOJ under Bush W absolutely prosecuted explicit pornography for political optics. (WARNING: Some pretty nasty stuff mentioned; text, not pictures) https://web.archive.org/web/20060321172250/http://www.thestranger.com/seattle/Content?oid=25246 https://web.archive.org/web/20060321172250/http://www.thestr... Primarily through leveraging the power of the AG to apply on-the-books obscenity laws to material which previously hadn't been targeted as such. When the courts took a dim view towards that, they decided they could get quicker wins by making it clear to Visa et al. that things would be uncomfortable if they didn't "voluntarily" choose to stop doing business with pornographic companies.
MBCook 2y ago
While I understand your point, doesn’t adult stuff also have very high rates of fraud and chargebacks? Even if a fair bit may have been correct but reported as fraud for personal reasons? Avoiding a category like that (or holding it to stricter standards) seems rather reasonable.
- lxgr 2y ago
  Maybe so (I have no idea), but the risk of fraud and chargebacks is not borne by the network. There are many other high risk industries they don't seem to have a problem with.
  - quesera 2y ago
    Visa sets merchant policy, and they do not allow high chargeback rates. The merchant bears the brunt of the economic loss, but chargebacks are a relatively expensive hassle for the network too, and ultimately they will drop merchants who cannot keep chargebacks low. Around 0.5% is considered reasonable. Anywhere in the 1% area for more than a few months will get a merchant dropped.
pkaye 2y ago
Isn't that because of high chargeback rates?

candiddevmike 2y ago

That number seems really low. At least 1-2% of all my purchases have fees associated with them, that's way more than $22. Small businesses, especially with lower priced items are hit with .50 + % fees too. It all adds up.

ejstronge 2y ago

> That works out to ~$22 per American per year. Not sure what Visa's operating costs for their network are, and I'm no big fan of them (or any other credit card company) but that's far cheaper than I would have expected You’re assuming quite a few things - the most significant are that the cost is borne equally among Americans. Instead, many Americans use credit card networks instead of debit cards, and those who use debit cards may have no option to avoid the fees.

metaphor 2y ago

> Not sure what Visa's operating costs for their network are, and I'm no big fan of them (or any other credit card company) but that's far cheaper than I would have expected given the convenience provided by almost never needing cash or checks. Of the $32.653 billon in revenue Visa pulled in last year, 2.3% was network and processing opex, while 53% was pure bottom line profit[1]. Furthermore, squaring 17.9% tax provision line item: if your household had simple married-filing-jointly tax return with an AGI greater than ~$139.5k, you paid more in 2023 taxes than Visa...and that assumes you live in a state without income taxes. Think about that for a hot minute while recalibrating expectations. [1] https://www.sec.gov/Archives/edgar/data/1403161/000140316123000099/v-20230930.htm#ib8781c2034714c6298c4cf56c426b196_94 https://www.sec.gov/Archives/edgar/data/1403161/000140316123...

s1artibartfast 2y ago
What are we supposed to take away from a high the high profit? How much did visa pay in taxes? Less than a single 140k family? Why are we comparing corporate taxes and individual taxes? They are completely different.
- NetOpWibby 2y ago
  Why do families pay less taxes than corporations? I'm not a money guy or a lawyer but that seems extremely *off*.
  - s1artibartfast 2y ago
    Because corporations pass profits on to individuals who also pay income taxes. It is a bogus comparison. Visa might "only" pay 17%, but if you are an owner, you are paying 17% and then another 20% on what's left.
    - NetOpWibby 2y ago
      Ahh, thanks for the clarification! The more I learn about how things actually work, the more irritated I get of the media for playing us.