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> They earn a non-negligible cut, yes, but stating that they're "taking 1-3 pennies" is simply not true (or rather, you'd have to expand your statement to "the

> They earn a non-negligible cut, yes, but stating that they're "taking 1-3 pennies" is simply not true (or rather, you'd have to expand your statement to "the card payments industry in collaboration with consumers"). That's the range of fees that the merchants have to pay [1], subtract about 1% for "cashback" programs, and that leaves 1-2% to Mastercard, the payment processor service and the banks of the consumer and the store. It's a hefty amount of money, no matter what - and MC has a very healthy profit margin [2]. > Girocard does not have a viable story for online payments (no actual processing capabilities beyond some Apple Pay only pilots, importantly no dispute resolution mechanism, which is critical for online payments, etc). I'm talking about physical presence payments primarily. But for online, SEPA Instant Transfer works out just fine - 10 seconds processing time from payment initiation to confirmation for the merchant, and dispute/chargeback has been a thing in SEPA Direct Debit and SEPA transfers from the start. Only thing is quite a few banks don't support it because their core IT is decades old. [1] https://www.fool.com/money/research/average-credit-card-processing-fees-costs-america/?pStoreID=@@6qFsI https://www.fool.com/money/research/average-credit-card-proc... [2] https://www.wsj.com/market-data/quotes/MA/financials/annual/income-statement https://www.wsj.com/market-data/quotes/MA/financials/annual/...

lxgr 2y ago
> for online, SEPA Instant Transfer works out just fine How? There is zero way to get back your money in case of problems as a payer! > dispute/chargeback has been a thing in SEPA Direct Debit and SEPA transfers from the start. Absolutely not for outbound transfers. You can chase a non-delivering merchant in court, but that's about it. For direct debit, the merchant has the equivalent problem – the payer can claw their money back without any justification ("I feel like spending it elsewhere" is a valid reason!) or recourse. > Only thing is quite a few banks don't support it because their core IT is decades old. It has absolutely nothing to do with "banks not supporting it because of old IT". There just is no incentive for them to play the role of arbiter between a payer and a payee at all! Consequently, there is no framework for it. SEPA (I)CT and DD are very efficient solutions for online payments only when payer and payee already extend significant trust in at least one direction. If there's mutual distrust, they are a terrible fit, and there's a reason people prefer cards or other schemes (sometimes layered on top of SEPA) providing dispute resolution.

lxgr 2y ago

> for online, SEPA Instant Transfer works out just fine How? There is zero way to get back your money in case of problems as a payer! > dispute/chargeback has been a thing in SEPA Direct Debit and SEPA transfers from the start. Absolutely not for outbound transfers. You can chase a non-delivering merchant in court, but that's about it. For direct debit, the merchant has the equivalent problem – the payer can claw their money back without any justification ("I feel like spending it elsewhere" is a valid reason!) or recourse. > Only thing is quite a few banks don't support it because their core IT is decades old. It has absolutely nothing to do with "banks not supporting it because of old IT". There just is no incentive for them to play the role of arbiter between a payer and a payee at all! Consequently, there is no framework for it. SEPA (I)CT and DD are very efficient solutions for online payments only when payer and payee already extend significant trust in at least one direction. If there's mutual distrust, they are a terrible fit, and there's a reason people prefer cards or other schemes (sometimes layered on top of SEPA) providing dispute resolution.