5 ms·

It’s Ticketmaster and LiveNation all over again. Business owners going to get gouged. Customers going to see price of items go up as business owners pass alon

by xyst 1y ago

It’s Ticketmaster and LiveNation all over again. Business owners going to get gouged. Customers going to see price of items go up as business owners pass along increased transaction costs. Yes - this will also impact you even if you don’t have a discover/capital one card.

trollbridge 1y ago
Soon you'll have to put up a "no Discover accepted" sign right next to the "Amex not accepted" sign.
- jldugger 1y ago
  I suspect the trick here is that capitalone issues so many other cards that once they standardize on it, merchants can't refuse their network without losing substantial amounts of business.
  - JCattheATM 1y ago
    Or customers start bailing because no one accepts their cards and the whole thing backfires...
    - greenavocado 1y ago
      What C1 has to do in the short-term is give customers a deal they cannot refuse to get them hooked. They can bag em and tag em later.
      - Kon-Peki 1y ago
        Discover has something like 150-200 different card designs that people can choose from, and they let you change them out almost as often as you want. You can even have more than one active at a time - perhaps keep one for your professional adulting wallet and another for your wild nightlife wallet. Better marketing around this would likely improve signups. I've had one in my wallet since college; it has never been a primary card for me. But I recently needed to choose a new one and scrolled through the options on my phone. From the small photos, I chose something that looked like some sort of abstract painting. When it came in the mail, I realized that it was not a painting at all. It was way more interesting than I had imagined. And indeed, it is the only credit card I've ever had that has received compliments. Does that influence how often I pull it out of my wallet as opposed to the other cards in there? Perhaps...
        jldugger 1y ago
        > Better marketing around this would likely improve signups. For 2023, the Capital One was the fourth largest issuer[1] by purchase volume. Post merger would put them at number three. The challenge isn't signups, it's retention. Discover being in the subprime category means it's often a borrower's oldest account and thus likely to be sticky. Capital One is no slouch either. But also: this may not even be a credit card play. Matt Stoller points out that there's a loophole in the Durbin rules for debit cards that hasn't been a factor until today: the rules that cut debit fees in half in 2011[3] only regulate networks operating as middlemen between banks and merchants. So presumably they can take those fees and double it again, at which point it's a fascinating question of who blinks first: merchants or Capital One. [1]: https://money.usnews.com/credit-cards/articles/biggest-us-credit-card-companies-this-year https://money.usnews.com/credit-cards/articles/biggest-us-cr... [2]: https://www.thebignewsletter.com/p/the-fed-is-behind-the-capital-onediscover https://www.thebignewsletter.com/p/the-fed-is-behind-the-cap... [3]: https://www.federalreserve.gov/paymentsystems/regii-average-interchange-fee.htm https://www.federalreserve.gov/paymentsystems/regii-average-...
  - trollbridge 1y ago
    It is very likely C1 will move away from MC/Visa. There's a massive amount of money on the table for them in the form of interchange fees. They're effectively becoming the next American Express. From a competitive landscape, this is probably a good thing - Discover never really did much issuance of cards by other banks, and this means competition against Amex.
    - jldugger 1y ago
      For the record, I believe we are saying the same thing.
- ravenstine 1y ago
  How common is it really that Discover isn't accepted these days? I don't have Amex, so not really sure about that, but I've been using Discover for years and I think I've only ever encountered 2 places that didn't take it – and neither of them were worth returning to anyway.
  - coldpie 1y ago
    > I've been using Discover for years and I think I've only ever encountered 2 places that didn't take it Really? For brick & mortar retail, my experience is pretty much only the major retailers accept it. Most small, local, or even regional retailers do not accept it.
    - ravenstine 1y ago
      I've used my Discover card at a bajillion bars, restaurants, and stores this last 2 years, all ranging from dives and mom & pops to bigger retailers and haven't had a single problem in that time. Then again, I've been living in Boston and Los Angeles, so maybe Discover is more accepted in major cities?
      - coldpie 1y ago
        Interesting! I wonder if it's a regional thing. I'm in the Twin Cities, so not a small town. Some smaller places do accept it, but I find it's pretty rare.
        Schiendelman 1y ago
        Others have noted that it's accepted anywhere Diner's Club is - you often see the DC logo without realizing that's Discover network.
    - const_cast 1y ago
      This was the Amex experience too until square came out. That little card reader that plugs into ipads and phones. These days, most small businesses are just using that, and that supports everything.
- chasil 1y ago
  What I am actually seeing are restaurant receipts with "price for cash" and a higher "price for credit." I am not seeing this for groceries or other goods. I understand that the "Durbin Amendment" had something to do with this. https://en.wikipedia.org/wiki/Durbin_amendment https://en.wikipedia.org/wiki/Durbin_amendment
  - jdeibele 1y ago
    Had an eye exam this morning and I needed to do a $30 co-pay. Pulled out a card to pay and I was asked if it was a credit card. I said yes and she said there'd be a 3% fee for using a credit card. I switched to my Discover debit card, which pays 1% back. My only recent experiences with this with transactions over $10 was a small restaurant and a construction project where they took the deposit on a card but would charge a 3% fee if we didn't pay by check. Many of the local convenience stores charge a fee to use a card.
    - chasil 1y ago
      I'm looking at a receipt in an Iowa restaurant that says "Total: $13.23; Pay With Cash: $12.71."
- WorldMaker 1y ago
  When I had Apple Card's daily cash going to Apple Cash was when Apple Cash was still a Discover (debit) card under the hood. (Last I checked it is a Visa [debit card] now.) During that time I found a bunch of places didn't take Discover and just didn't even put up a sign (even ones that had "Amex not accepted signs") because they didn't think anyone cared. It was never an issue then because I'd just switch back to the Apple Card (Mastercard), but as the only Discover card I've ever had in my "wallet" (virtual or otherwise) it was an interesting experience that left a lasting impression.

by xyst 1y ago

trollbridge 1y ago

Soon you'll have to put up a "no Discover accepted" sign right next to the "Amex not accepted" sign.

jldugger 1y ago
I suspect the trick here is that capitalone issues so many other cards that once they standardize on it, merchants can't refuse their network without losing substantial amounts of business.
- JCattheATM 1y ago
  Or customers start bailing because no one accepts their cards and the whole thing backfires...
  - greenavocado 1y ago
    What C1 has to do in the short-term is give customers a deal they cannot refuse to get them hooked. They can bag em and tag em later.
    - Kon-Peki 1y ago
      Discover has something like 150-200 different card designs that people can choose from, and they let you change them out almost as often as you want. You can even have more than one active at a time - perhaps keep one for your professional adulting wallet and another for your wild nightlife wallet. Better marketing around this would likely improve signups. I've had one in my wallet since college; it has never been a primary card for me. But I recently needed to choose a new one and scrolled through the options on my phone. From the small photos, I chose something that looked like some sort of abstract painting. When it came in the mail, I realized that it was not a painting at all. It was way more interesting than I had imagined. And indeed, it is the only credit card I've ever had that has received compliments. Does that influence how often I pull it out of my wallet as opposed to the other cards in there? Perhaps...
      - jldugger 1y ago
        > Better marketing around this would likely improve signups. For 2023, the Capital One was the fourth largest issuer[1] by purchase volume. Post merger would put them at number three. The challenge isn't signups, it's retention. Discover being in the subprime category means it's often a borrower's oldest account and thus likely to be sticky. Capital One is no slouch either. But also: this may not even be a credit card play. Matt Stoller points out that there's a loophole in the Durbin rules for debit cards that hasn't been a factor until today: the rules that cut debit fees in half in 2011[3] only regulate networks operating as middlemen between banks and merchants. So presumably they can take those fees and double it again, at which point it's a fascinating question of who blinks first: merchants or Capital One. [1]: https://money.usnews.com/credit-cards/articles/biggest-us-credit-card-companies-this-year https://money.usnews.com/credit-cards/articles/biggest-us-cr... [2]: https://www.thebignewsletter.com/p/the-fed-is-behind-the-capital-onediscover https://www.thebignewsletter.com/p/the-fed-is-behind-the-cap... [3]: https://www.federalreserve.gov/paymentsystems/regii-average-interchange-fee.htm https://www.federalreserve.gov/paymentsystems/regii-average-...
- trollbridge 1y ago
  It is very likely C1 will move away from MC/Visa. There's a massive amount of money on the table for them in the form of interchange fees. They're effectively becoming the next American Express. From a competitive landscape, this is probably a good thing - Discover never really did much issuance of cards by other banks, and this means competition against Amex.
  - jldugger 1y ago
    For the record, I believe we are saying the same thing.
ravenstine 1y ago
How common is it really that Discover isn't accepted these days? I don't have Amex, so not really sure about that, but I've been using Discover for years and I think I've only ever encountered 2 places that didn't take it – and neither of them were worth returning to anyway.
- coldpie 1y ago
  > I've been using Discover for years and I think I've only ever encountered 2 places that didn't take it Really? For brick & mortar retail, my experience is pretty much only the major retailers accept it. Most small, local, or even regional retailers do not accept it.
  - ravenstine 1y ago
    I've used my Discover card at a bajillion bars, restaurants, and stores this last 2 years, all ranging from dives and mom & pops to bigger retailers and haven't had a single problem in that time. Then again, I've been living in Boston and Los Angeles, so maybe Discover is more accepted in major cities?
    - coldpie 1y ago
      Interesting! I wonder if it's a regional thing. I'm in the Twin Cities, so not a small town. Some smaller places do accept it, but I find it's pretty rare.
      - Schiendelman 1y ago
        Others have noted that it's accepted anywhere Diner's Club is - you often see the DC logo without realizing that's Discover network.
  - const_cast 1y ago
    This was the Amex experience too until square came out. That little card reader that plugs into ipads and phones. These days, most small businesses are just using that, and that supports everything.
chasil 1y ago
What I am actually seeing are restaurant receipts with "price for cash" and a higher "price for credit." I am not seeing this for groceries or other goods. I understand that the "Durbin Amendment" had something to do with this. https://en.wikipedia.org/wiki/Durbin_amendment https://en.wikipedia.org/wiki/Durbin_amendment
- jdeibele 1y ago
  Had an eye exam this morning and I needed to do a $30 co-pay. Pulled out a card to pay and I was asked if it was a credit card. I said yes and she said there'd be a 3% fee for using a credit card. I switched to my Discover debit card, which pays 1% back. My only recent experiences with this with transactions over $10 was a small restaurant and a construction project where they took the deposit on a card but would charge a 3% fee if we didn't pay by check. Many of the local convenience stores charge a fee to use a card.
  - chasil 1y ago
    I'm looking at a receipt in an Iowa restaurant that says "Total: $13.23; Pay With Cash: $12.71."
WorldMaker 1y ago
When I had Apple Card's daily cash going to Apple Cash was when Apple Cash was still a Discover (debit) card under the hood. (Last I checked it is a Visa [debit card] now.) During that time I found a bunch of places didn't take Discover and just didn't even put up a sign (even ones that had "Amex not accepted signs") because they didn't think anyone cared. It was never an issue then because I'd just switch back to the Apple Card (Mastercard), but as the only Discover card I've ever had in my "wallet" (virtual or otherwise) it was an interesting experience that left a lasting impression.