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Lol, visa had network effect. It also took a long time to build up such a network. Replacing all payment terminals is not easy. And as a customer I'm more lik

by jopsen 2y ago

Lol, visa had network effect. It also took a long time to build up such a network. Replacing all payment terminals is not easy. And as a customer I'm more likely to care of my card works and not care if I'm charged x% fee. The visa trick if any, was hiding the credit card fee and pushing it to merchants. Whether its a trick or not is hard to tell, for small businesses it was probably bad, but for a big business dealing with lots of cash is probably not cheap.

lxgr 2y ago
> I'm more likely to care of my card works and not care if I'm charged x% fee. Sure, any alternative needs to work on a practical/technical level, be convenient, have fraud protection etc. But if it does, and a merchant I know and trust (these are fairly big caveats!) were to offer me a discount equivalent to what my card issuing bank pays me in cashback and then some as an incentive for paying using that alternative, why wouldn't I do it? > Replacing all payment terminals is not easy. Terminals already support multiple payment networks today, some even non-card based. > for small businesses it was probably bad, but for a big business dealing with lots of cash is probably not cheap. It's exactly the other way around. Big chains can strike custom interchange and scheme fee deals with Visa and Mastercard, because they have the credible threat of offering steep discounts on store cards or other "on-us" payment methods; small businesses basically need to accept what they get.
- chii 2y ago
  > were to offer me a discount equivalent to what my card issuing bank pays me in cashback and that's exactly why these card networks made the merchant agree in the contract to not do exactly that.
  - eszed 2y ago
    I think that shouldn't be permitted. (As in, be illegal for the card companies to impose or enforce.) On the other hand, most gas stations seem to post credit vs cash prices, so they get away with it. What's the story there? Why don't more merchants do it? It's also contrary to card agreements for merchants to add an extra fee ("it's +0.50 if you use a credit card, is that OK?"), but that doesn't seem to be meaningfully enforced.
    - chii 2y ago
      It's not 100% enforced, but to the card networks, they dont need 100% enforcement - they just need majority of merchants to comply. Small corner stores and gas stations probably could get away with surcharges, but not big box stores.
- kidneystereotyp 2y ago
  for the only dumb mouse in this thread: what would an alternative be?
Animats 2y ago
Visa was originally a chaord - a strange construct jointly owned by competing banks. That idea never caught on, but worked. See Dee Hock's "Birth of the Chaordic Age".
AdieuToLogic 2y ago
> Lol, visa had network effect. Visa, the organization, is little more than a small clearing house. Credit card issuers (banks) and credit card processors (also banks) define the network in so far as determining what organizations can be "on the visa rails" (also almost exclusively banks). > The visa trick if any, was hiding the credit card fee and pushing it to merchants. Merchants pay their discount rate and customers pay their interest rate. "The visa trick", as it were, was getting customer confidence in credit cards being accepted at enough merchants to warrant use. There was never a "hiding the credit card fee." Both parties pay and always have. There was only patience by the banks and heavy marketing to customers in order to create demand that would force merchants to have to accept credit cards.

by jopsen 2y ago

lxgr 2y ago

> I'm more likely to care of my card works and not care if I'm charged x% fee. Sure, any alternative needs to work on a practical/technical level, be convenient, have fraud protection etc. But if it does, and a merchant I know and trust (these are fairly big caveats!) were to offer me a discount equivalent to what my card issuing bank pays me in cashback and then some as an incentive for paying using that alternative, why wouldn't I do it? > Replacing all payment terminals is not easy. Terminals already support multiple payment networks today, some even non-card based. > for small businesses it was probably bad, but for a big business dealing with lots of cash is probably not cheap. It's exactly the other way around. Big chains can strike custom interchange and scheme fee deals with Visa and Mastercard, because they have the credible threat of offering steep discounts on store cards or other "on-us" payment methods; small businesses basically need to accept what they get.

chii 2y ago
> were to offer me a discount equivalent to what my card issuing bank pays me in cashback and that's exactly why these card networks made the merchant agree in the contract to not do exactly that.
- eszed 2y ago
  I think that shouldn't be permitted. (As in, be illegal for the card companies to impose or enforce.) On the other hand, most gas stations seem to post credit vs cash prices, so they get away with it. What's the story there? Why don't more merchants do it? It's also contrary to card agreements for merchants to add an extra fee ("it's +0.50 if you use a credit card, is that OK?"), but that doesn't seem to be meaningfully enforced.
  - chii 2y ago
    It's not 100% enforced, but to the card networks, they dont need 100% enforcement - they just need majority of merchants to comply. Small corner stores and gas stations probably could get away with surcharges, but not big box stores.
kidneystereotyp 2y ago
for the only dumb mouse in this thread: what would an alternative be?

Animats 2y ago

Visa was originally a chaord - a strange construct jointly owned by competing banks. That idea never caught on, but worked. See Dee Hock's "Birth of the Chaordic Age".

AdieuToLogic 2y ago

> Lol, visa had network effect. Visa, the organization, is little more than a small clearing house. Credit card issuers (banks) and credit card processors (also banks) define the network in so far as determining what organizations can be "on the visa rails" (also almost exclusively banks). > The visa trick if any, was hiding the credit card fee and pushing it to merchants. Merchants pay their discount rate and customers pay their interest rate. "The visa trick", as it were, was getting customer confidence in credit cards being accepted at enough merchants to warrant use. There was never a "hiding the credit card fee." Both parties pay and always have. There was only patience by the banks and heavy marketing to customers in order to create demand that would force merchants to have to accept credit cards.