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I would challenge any retail business to beat the 2.5% rate on their cash transactions once the various transit, security and banking fees have been factored in

I would challenge any retail business to beat the 2.5% rate on their cash transactions once the various transit, security and banking fees have been factored in. Those armored trucks don't work for free. The US payment networks are also incredibly robust with some fantastical operational guarantees. I cannot recall the last time I couldn't get an online authorization at a merchant terminal. There are rooms of people monitoring these things like a hawk 24/7/365. Imagine being called by your ISP proactively when they detect >.01% packet loss on your line. That was my job for an entire year. Calling banks on the phone in the middle of the night because we think there might be an issue before there actually is an issue. Statistically speaking, this is one of the most certain things in the life of a typical American. Visa alone processes a quarter trillion (10^12) transactions per year. We've got a lot of samples that say the system works really well and might be worth the cost. You can point to regulation and artificial moats for prohibiting competition, but it's genuinely a difficult problem to solve, even if you can do it purely digital. Trust is the most challenging element. I think moving cash, checks and other paper around is easier in a lot of ways.

tristanj 1y ago
Visa's merchant fee for in-person transactions is only 0.3% in Europe, with the exact same robustness and operational guarantees you describe.
- blasphemers 1y ago
  Visa's fee in the US is also only 0.3%. Most of the interchange fee goes to the issuing bank and is used for cardholder rewards/benefits.
kobalsky 1y ago
Well, it used to be justified but if they are lowering their rates it's in part because they are starting to get replaced by regional wallets. Personally I think it's fantastic they are losing ground because it really rubs me the wrong way when they force their morals [1] [2]. [1] https://www.theverge.com/2021/8/19/22632797/onlyfans-prohibit-sexually-explicit-content-porn-creators https://www.theverge.com/2021/8/19/22632797/onlyfans-prohibi... [2] https://www.theguardian.com/world/2025/jul/29/mastercard-visa-backlash-adult-games-removed-online-stores-steam-itchio-ntwnfb https://www.theguardian.com/world/2025/jul/29/mastercard-vis...
- lotsofpulp 1y ago
  In the US, they are getting replaced by ACH. The seller gets to receive payment at near zero cost, with no chargeback risk. A 3% credit card surcharge is enough to make me switch my insurance/mobile network/home internet/utility/property tax transactions to ACH to avoid losing money on a credit card transaction that I am never going to need to chargeback.
  - barbazoo 1y ago
    Careful with utilities etc there were stories here of people being charged outrageous amounts for their electricity use iirc (Texas?). I’d be hesitant to give them my bank account info, it could take years for that to get settled.
    - bob1029 1y ago
      > outrageous amounts Apologies for the tangent, but variable rates are good. For everyone. For the grid. For the environment. I wish we could stop framing it as consumer extortion and start looking into educational solutions. $9/kWh was bad but it literally could not get worse due to the market rules. I don't know anyone who was using Griddy who was not aware of this possibility. I had to pay ~$1200 that month for usage and I still came out way ahead of anyone who was using fixed rate plans for the year. This last part is probably the actual reason they made variable rate electricity plans illegal for consumers in Texas.
      - barbazoo 1y ago
        In BC I’m on a progressive 2 tier system. After x kWh the price goes up. But that’s based on use. I think that’s fair, otherwise it favors the rich.
- blasphemers 1y ago
  Except the networks are not forcing their morals onto anyone, they are not payment processors.
kalleboo 1y ago
That high fee doesn't go into running the network though, it goes into customer rewards schemes that end up being a tax on the poor who don't qualify for them but still have to pay the fees.
llsf 1y ago
> I would challenge any retail business to beat the 2.5% rate on their cash transactions once the various transit, security and banking fees have been factored in. Those armored trucks don't work for free. Lots of countries are fine with charge card, connecting directly to their bank account instead of going thru intermediaries. It does not offer the flexibility of the US credit card ecosystem, but lower fees for merchants (and so for end user). It might be a matter of culture and habits. But for some the Visa/MC/Amex fees seem too high, even if most is given back to the end user, it artificially increases the prices (that is why the US Gov. charges me more if I insist on paying my US property taxes with as credit card).

tristanj 1y ago

Visa's merchant fee for in-person transactions is only 0.3% in Europe, with the exact same robustness and operational guarantees you describe.

blasphemers 1y ago
Visa's fee in the US is also only 0.3%. Most of the interchange fee goes to the issuing bank and is used for cardholder rewards/benefits.

kobalsky 1y ago

Well, it used to be justified but if they are lowering their rates it's in part because they are starting to get replaced by regional wallets. Personally I think it's fantastic they are losing ground because it really rubs me the wrong way when they force their morals [1] [2]. [1] https://www.theverge.com/2021/8/19/22632797/onlyfans-prohibit-sexually-explicit-content-porn-creators https://www.theverge.com/2021/8/19/22632797/onlyfans-prohibi... [2] https://www.theguardian.com/world/2025/jul/29/mastercard-visa-backlash-adult-games-removed-online-stores-steam-itchio-ntwnfb https://www.theguardian.com/world/2025/jul/29/mastercard-vis...

lotsofpulp 1y ago
In the US, they are getting replaced by ACH. The seller gets to receive payment at near zero cost, with no chargeback risk. A 3% credit card surcharge is enough to make me switch my insurance/mobile network/home internet/utility/property tax transactions to ACH to avoid losing money on a credit card transaction that I am never going to need to chargeback.
- barbazoo 1y ago
  Careful with utilities etc there were stories here of people being charged outrageous amounts for their electricity use iirc (Texas?). I’d be hesitant to give them my bank account info, it could take years for that to get settled.
  - bob1029 1y ago
    > outrageous amounts Apologies for the tangent, but variable rates are good. For everyone. For the grid. For the environment. I wish we could stop framing it as consumer extortion and start looking into educational solutions. $9/kWh was bad but it literally could not get worse due to the market rules. I don't know anyone who was using Griddy who was not aware of this possibility. I had to pay ~$1200 that month for usage and I still came out way ahead of anyone who was using fixed rate plans for the year. This last part is probably the actual reason they made variable rate electricity plans illegal for consumers in Texas.
    - barbazoo 1y ago
      In BC I’m on a progressive 2 tier system. After x kWh the price goes up. But that’s based on use. I think that’s fair, otherwise it favors the rich.
blasphemers 1y ago
Except the networks are not forcing their morals onto anyone, they are not payment processors.

kalleboo 1y ago

That high fee doesn't go into running the network though, it goes into customer rewards schemes that end up being a tax on the poor who don't qualify for them but still have to pay the fees.

llsf 1y ago

> I would challenge any retail business to beat the 2.5% rate on their cash transactions once the various transit, security and banking fees have been factored in. Those armored trucks don't work for free. Lots of countries are fine with charge card, connecting directly to their bank account instead of going thru intermediaries. It does not offer the flexibility of the US credit card ecosystem, but lower fees for merchants (and so for end user). It might be a matter of culture and habits. But for some the Visa/MC/Amex fees seem too high, even if most is given back to the end user, it artificially increases the prices (that is why the US Gov. charges me more if I insist on paying my US property taxes with as credit card).