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I always find it entertaining to hear people try to argue that what these companies do is soooooo difficult and that's why they're valuable. It's just multiple

I always find it entertaining to hear people try to argue that what these companies do is soooooo difficult and that's why they're valuable. It's just multiple computers keeping a balance. It's not complicated. No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect. Time to do away with these foreign entities.

ajb 9mo ago
Each individual detail isn't difficult, the moat is dealing with a huge, huge, pile of them. But most of the details are driven by laws and regulations: of the entity in charge of those things decides it doesn't want you to have a moat any more, you've got a problem. If there's one thing the EU really does have, it's the capacity to revise regulations.
- arghwhat 9mo ago
  Rather than a moat of details, it's first-mover advantage. Anyone can run a credit card network, but merchants and banks need to support them. Many others exist, but the issue is that they don't have widespread adoption. Solutions that work exist, which means the lesser supported alternative is not widely used, which again reduces reason for wider adoption... Regulation changes "why bother" to "oh crap".
  - black_puppydog 9mo ago
    jup. once this is built, if adoption is lacking, it's not hard to imagine how the EU could make it the standard payment option.
- saubeidl 9mo ago
  > If there's one thing the EU really does have, it's the capacity to revise regulations. This is the central power lever of the EU and one that is frequently underestimated. European power projection doesn't work through tanks and aircraft carriers. It works with regulations, trade deals and economic incentives. Remember how a few years ago everyone was scrambling to get GDPR-compliant? That wasn't some random event. That was the EU projecting power. Why do iPhones have USB-C now? European soft power. Why are things like Champagne and Prosciutto di Parma protected brands that can only be sold if they're from the actual region? And I mean not just in Europe itself, but everywhere it has deals? Canada, Japan, India, China, Mercosur, etc etc? European soft power. The EU is playing a different game from the other major players. Not one of brute force, but one of shifting the foundational rules of commerce in their favor. And they're very good at it.
  - notahacker 9mo ago
    Yep. And whereas the EU can't magic itself into having enough fossil fuels or bootstrap a commercially viable reusable rocket launch industry overnight, it absolutely can align payments legislation and mandate that point of sale devices accepting Payment Provider I in Europe should also accept Payment Provider II...
ericmay 9mo ago
> No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect. I don't know that the problem is sophisticated, but it's certainly complex [1]. It's a bit of both in terms of complexity and defending a moat, which all businesses do, including, and especially European ones. And companies like Visa, Mastercard, American Express, &c. arose initially from solving a real need. Before these companies came into existence when you traveled you'd have to take cash, or traveler's checks or some other nonsense. Today you can, at least as an American, just walk in to the subway in just about any country and tap to pay. Need a coffee at Mt. Fuji? Easy. Buying a bottle of Calvados in some remote area? Yea just tap to pay with your Mastercard. > Time to do away with these foreign entities. You'll never do that. Why? Because at a minimum you want American tourist dollars and Europe isn't going to start issuing European credit cards to Americans or other citizens around the world. [1] Why is it complex? Well you have to deal with American and European financial regulations, KYC, &c. - you have to vet merchants, you have to run the infrastructure to process transactions, refunds, direct payments from bank accounts to pay for cards, and all of those things. Those are real, genuine business activities that are non-negotiable and while they may seem simple, in practice they are not at all simple.
- raverbashing 9mo ago
  About your point in [1] yes it is complex but maybe 50% is done by the issuing bank/institution And people do underestimate the complexity of it
- joevandyk 9mo ago
  This last summer, I couldn’t use my US-issued Visa or Mastercard credit card in most places in the Netherlands. Had to use debit.
  - volkl48 9mo ago
    Literally just got back from a trip there and didn't find a single business or transaction that I couldn't pay for with various US-issued (Chase + BoA) Visa credit cards via tap. Even more surprisingly to me - a pretty decent chunk of businesses even would accept AmEx. By no means all, but I recall it being basically nonexistent not that long ago. And to be clear - much of my time was not in areas that get a ton of foreign tourist visitors. Not saying your experience didn't happen, but given our very different experiences it might be something with your particular bank/issuer/card?
havaloc 9mo ago
I think it's probably a little bit harder than you think with all the rules and regulations out there. I would highly encourage anybody who's remotely interested, listen to the Acquired podcast episode regarding Visa. It's actually quite fascinating how it was started. You may balk at the length, but the whole thing had me interested. https://www.acquired.fm/episodes/visa https://www.acquired.fm/episodes/visa
- unmole 9mo ago
  India built RuPay, China built UnionPay. There's no reason why Europe can't do the same.
  - psychoslave 9mo ago
    France still has CB https://en.wikipedia.org/wiki/CB_Bank_Card_Group https://en.wikipedia.org/wiki/CB_Bank_Card_Group
    - Beretta_Vexee 9mo ago
      There are equivalents in several European countries. The problem is that these networks are national and not European, let alone global. National banking players did not want to give up their turf. The European Union had to twist their arms to get them to agree to SEPA transfers, instant transfers, etc. If banking players cannot agree, then regulation (or the threat of regulation) must be used.
      - psychoslave 9mo ago
        Well, yes, but it happens that European directives do happen and are actually followed or enforced. Without laws there would be no bank in the first place, neither at national or paneuropean level.
    - clownpenis_fart 9mo ago
      CB actually have higher security standards than visa. I once worked at a company doing payment card personalization (its the company who turn blank smart cards into finalized cards on behalf of banks. They print the customers names, emboss the account number, and program the chip and the magstrip) Every year they had comprehensive security audits from Visa, Mastercard and Groupe Carte Bleue. One guy there told me that they did the Groupe Carte Bleue audit first, because its the toughest. If they passed it they were sure to pass the others.
bparsons 9mo ago
Canada has had the INTERAC payment system for over 20 years now. It is privately run by Canadian banks, universally accepted and runs on a cost recovery basis.
- swat535 9mo ago
  So there are 3 kinds of "debit cards" in Canada: 1. Debit Mastercard/VISA. These are Debit Cards that use the Mastercard/VISA communication system to process transactions. While they are not "Credit" cards because you are using cash in an account that is your money, they rely upon the VISA/Mastercard system and merchants will be charged the Mastercard/VISA fee like a Credit Card. 2. Interac Debit Card. Interac was the first company to offer a debit card type system in Canada, and they are the traditional bank card. These cards use the Interac system (so does eTransfer) and Merchants are charged by Interac for using the system. Its typically less than Mastercard/VISA, which is why you see these "Debit Card only" signs. 3. Mastercard/VISA and Interac hybrid cards. These are newer and combine both Mastercard/VISA and Interac cards in one. The merchant can choose how they want to proceed. Most of these "Debit" only signs are really saying "Interac only", but because for 30 years Interac was the only provider of Debit cards in Canada, it became the common vernacular to say "Debit" when you mean "Interac".
soared 9mo ago
Required Dropbox comment: https://news.ycombinator.com/item?id=9224 https://news.ycombinator.com/item?id=9224
- direwolf20 9mo ago
  What about it?
jlarocco 9mo ago
I can't disagree that they have a moat, but it's a hard problem and if it were as easy as you say somebody would be disrupting them already to get a share of that $24T. Just dealing with fraud is a major problem in itself.
- direwolf20 9mo ago
  Fraud is mostly resolved by the two banks involved. The network is just that, a network.
  - tlogan 9mo ago
    The problem arises when the banks are in two different countries. If money leaves your account and mistakenly ends up in an account in another country, even within Europe, it can be very difficult to recover. That is why national payment systems tend to work relatively well. Cross border systems are a completely different challenge.
ajsnigrutin 9mo ago
The problem here is interoperability. Now most merchants have to work with two companies, visa and mastercard. Want to accept russian MIR cards? Well, in some countries you're not allowed to, and in some, you must, since visa and mastercard don't work there. Now if you add a european company to the mix... whill their cards get accepted in south africa? What about in eg turkey? China? Will whatever indian alternative is get accepted in france? Currently, with a visa and mastercard, except for maybe russia and iran, you're pretty sure it'll get accepted at least somewhere in any urban area you visit, so you won't be hungry and have somewhere to sleep. If my bank replaces my mastercard with the EU alternative, I won't be that confident about that for quite a few years. On the other hand, cash is still the king of everything everywhere... somehow some politicians are trying to get rid of that for some reason.
- account42 9mo ago
  Most merchants don't work with Visa and Mastercard, they work with payment processors like Fiserv, or other middle men even further removed from the card networks, that already abstract all the different cards (including existing local debit cards) away into a unified flow.
  - ajsnigrutin 9mo ago
    Sure, there's a gajillion of those processors all over the world, and they somehow all work with mastercard and visa. Diners club? Well.. "it depends". Many don't work with it. Indian, russian, chinese, cards? Maybe in india, russia and china, but you shouldn't expect it to work "everywhere" like visa and mastercard. Same will be true for EU cards for quite a few years, especially if the system gets fragmented into many different companies using many different systems, and you'll always wonder if your german card will get accepted in Algeria like your friends' french card is.
- wiseowise 9mo ago
  > Want to accept russian MIR cards? Thankfully, this use case has been solved by Russians themselves.
tiffanyh 9mo ago
Creating Acceptance is super difficult. Hence why crypto hasn't taken off with merchants. Because who's going to pay for merchants to change their point-of-sale systems to accept a new payment method.
- autoexec 9mo ago
  If the entirety of Europe comes up with a single system I think that'll be more than enough incentive for merchants to update their pos software to accept the new network. I hope that they are eventually so successful that merchants here in the US support them too. I'd love to stop using visa and mastercard.
  - tiffanyh 9mo ago
    You mean like Pix in Brazil, or UPI in India.
- direwolf20 9mo ago
  Crypto is also a shit payment method though. Expensive and difficult to run and with high transaction fees. And if you use a chain with low transaction fees, there's no consensus on which chain that is (otherwise transaction fees would be high) so you have to support all of them. Then you might as well outsource the whole thing.
  - SenorKimchi 9mo ago
    I have done some work at crypto exchanges so I am a bit biased. I would agree that BTC and many assets are a terrible payment method due to poor UX (block time, clunky wallets), speculation, and wild price swings. But crypto in general works well for payments I would say. Transaction fees have improved significantly where it can be on the order of a few cents per transaction. So yes this is a little high for a $1 candy bar but this is fantastic for a $1,000 watch. The number of chains and interoperability is a bit of a pain at the moment, but this problem can be resolved by delegating to a payment processor, or simply targetting ETH, the top stablecoins, and BTC which account for the vast majority of the market. > Expensive and difficult to run Again I am biased because of my experience, but I could set up a payment gateway for ETH in a few hours using free public nodes at virtually no cost. No business overhead. No agreements with payment processors or card companies. The biggest cost and overhead ends up being accounting, because crypto still has ill defined laws and regulation.
BurningFrog 9mo ago
If you gave any argument for why and how this is true, I might have believed it.
eastbayjake 9mo ago
I'm a little shocked that of all the comments so far, no one has mentioned the financial risk borne by this whole value chain. OP is operating as if it's just a debit system moving money from one account to another but: - For many consumers there isn't sufficient money in the account to settle all the one-time and ongoing transactions they are liable for -- credit cards are giving you a revolving loan, there's risk it will not be repaid, and that risk ends up reflected in processing fees - For many _businesses_ managing cash flow is existential -- as merchants they want to be paid as quickly as possible, but as B2B customers they want to have 30-60 days to sell the input goods they've purchased so they can pay for them upstream. There is a premium for that flexibility that gets reflected in processing fees. - For both consumers and merchants, fraud risk is real and while it's the most solvable part of all this it's a real (and costly!) factor today. That risk for fraud gets moved upstream to the networks/acquirers/processors/issuers and that premium shows up in (you guessed it) processing fees. If you want to switch the world to a debit-based system where economic transactions are limited by cash on hand, I'd argue that's a poorer and less dynamic world than the one we're operating in today.
- functionmouse 9mo ago
  I shouldn't have to pay for your usury economy if I'm using cash. If that were really the issue, these companies would have no problems with businesses charging different prices or offering discounts for cash.
  - eastbayjake 9mo ago
    The networks allow cash discounts if it's posted clearly and the customer has an option to use a different payment method -- you see this on every gas station sign alongside every highway in America. (What's _not_ permitted is adding a secret surcharge or item mark-up for credit card payments)
    - bombcar 9mo ago
      The latter is allowed now - after the backs of the credit card processors were broken. They fought tooth and nail against cash discounts OR credit surcharges and they finally lost. In some areas it's rampant that you get a pretty substantial discount - often 4 or 5%, better than cash-back - and many places post "cash prices". You can get even more if you're willing to ride the hassle of the gift card train. The credit card companies know people spend more if they use credit cards, and they turn around and sell that to the merchants.
instagib 9mo ago
Then the vendors pay 2-4% of credit transactions to the payment processor or shift the cost to consumers. It’s about the cost of another employee in salary per year for restaurants. While many other countries employ pay by QR code which is free.
- bitcurious 9mo ago
  > While many other countries employ pay by QR code which is free. In which countries is this service free? Alipay and Wechat are probably the biggest actors in this space both take a cut.
dwroberts 9mo ago
It’s a little bit of both right? They’re entrenched yes, but it’s not technologically trivial either. The operations they do for each account might be simple but the shear volume of transactions they handle is enormous. The scale makes it complicated.
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codyb 9mo ago
Sounds like you should build a competitor if that's literally all it is... I suspect there's quite a few other things you have to consider when you're managing trillions of dollars of transactions a year. Fraud, settlement times, up times, security, customer service, debt collection, interest rate calculation, reach, KYC, record keeping, legal inquiries. But I'm sure we're just a couple grok comments away from a competitor
- tflinton 9mo ago
  Don't forget stand-ins, much of this hasn't discussed that credit card networks do a lot of "stand-ins" when the issuer is unreachable (bank goes down, latency too high, etc). It's a bit unclear how things like Wero would operate when a network issue hits as Wero and EU rails won't just assume the liability for the transaction and hope it clears later as it does on Visa/Mastercard.
- resonious 9mo ago
  Very good examples. I'd add that Trust and connections are also huge in payments. Even if your technology is perfect, you need to integrate with tons of different systems to get full coverage, and the people who run those systems don't sign contacts with just anyone.
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olalonde 9mo ago
It's not a technology problem. It's a problem of being compliant with vague government regulations (e.g. AML/KYC) and getting banked (which is very difficult... thanks to perceived AML risk).
jstummbillig 9mo ago
> I always find it entertaining to hear people try to argue that what these companies do is soooooo difficult and that's why they're valuable. It's just multiple computers keeping a balance. Roughly nobody argues that part is difficult. > It's not complicated. It's very complicated, for the reasons that all complex real world systems are. It's an absolute mess. > Time to do away with these foreign entities. I don't really mind the "foreign" part, but it's fairly wild that essential financial infrastructure is privatized, so let's!
bob1029 9mo ago
The #1 thing you're paying for with Visa and the others is uptime. Knowing the card will always work 24/7/365 with such a high degree of assurance is a non-zero factor in how well a consumer economy performs.
simplyluke 9mo ago
> It's just multiple computers keeping a balance. It's not complicated. It wouldn't be hacker news without a comment like this. I haven't personally worked in finance, but I've had a lot of friends do it. It _absolutely_ is complicated. It's not too complicated for a nation or the EU to do it in house, but no, there's a bit more there than "Claude make me a ledger"
- otterley 9mo ago
  My usual response to claims like this is “if it’s so easy, why haven’t you done it yet?”
  - Supermancho 9mo ago
    Trolling is not insightful. A number of other companies already have "done it" and are in use across the world. The question is why aren't western nations ALL using alternates yet? The article is pointing out that a new attempt is gaining political momentum, which answers the question.
    - otterley 9mo ago
      Those alternatives are not worldwide payment networks with near-universal acceptance. They’re scoped much smaller. Even then, those independent efforts have either been implemented by law as a political strategic measure or are subsidized. They wouldn’t exist but for those supporting elements. Having federated payment networks may be good politics, but it’s not particularly efficient and it impedes world trade. At any rate, making someone who haughtily trivializes a problem solve that same problem is a useful exercise both in the complexity of the subject matter, and—perhaps more importantly—in humility.
    - NoPicklez 9mo ago
      > It's just multiple computers keeping a balance. It's not complicated. I'd argue this was the trolling
- Sebguer 9mo ago
deleted 9mo ago
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danielodievich 9mo ago
I very distinctly remember a dev talk at early 2000s Microsoft where a distinguished engineer recently come to MSFT from VISA described the herculean effort that it took to run this network. There was an anecdote that he shared that stuck with me where they had a worldwide daily balance mismatch of something like 0.37 cents and it was all hands on deck to find the missing thing. Yeah, man, it is very difficult to run these networks, hence so much money in it.
csomar 9mo ago
The fact that Asean and India did it, just like that, shows that the technical difficulty is no longer the issue. Visa and Mastercard exists because of US hegemony. The Europeans just put their heads in the sand for a long time and accepted the "superiority" of American payment solutions because it benefited their geopolitical play at the time. Some sources (Old and New): - https://www.reuters.com/business/finance/exclusive-visa-complains-us-govt-about-india-backing-local-rival-rupay-2021-11-28/ https://www.reuters.com/business/finance/exclusive-visa-comp... - https://jakartaglobe.id/business/indonesia-expands-qris-reach-despite-us-trade-pressure https://jakartaglobe.id/business/indonesia-expands-qris-reac... - https://www.china-briefing.com/news/wto-china-unionpay-ruling-paves-way-for-visa-mastercard/ https://www.china-briefing.com/news/wto-china-unionpay-rulin... - https://valorinternational.globo.com/foreign-affairs/news/2025/07/16/us-targets-pix-in-probe-into-brazils-unfair-trade-practices.ghtml https://valorinternational.globo.com/foreign-affairs/news/20...
protocolture 9mo ago
>I always find it entertaining to hear people try to argue that what these companies do is soooooo difficult and that's why they're valuable. It's just multiple computers keeping a balance. It's not complicated. Honestly its a few things. No, the technical and financial implementation is quite complicated. Its not just a balance in a database. Yes, they do maintain control through a vertically integrated business structure. But its very easy to justify due to risk management. >No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect. The moat is the difficulty. And they do protect it. Theres a common type of customer in IT who thinks they can do everything themselves and the "finding out" phase of their shenanigans is often extremely costly, not just for themselves but for their customers. The chief product of a good supplier is not just software or technical services, its the regimented and disciplined implementation of those services. Some people will pay more for an IT provider who permits less because they lack the internal organizational discipline to do these things correctly for themselves. As far as various governments are concerned, the payment card industry is largely self regulating. And that's because the apex card providers provide the balance of enforcement downstream to all the nitwits who would otherwise have to be stung by hundreds of security lapses before they would otherwise respond. The PCI SSC has created an environment where data security is more restrictive than most polity's would require, and its standards are applied worldwide. Often people get liability exemptions for meeting this standard, rather than the standard itself being enforced by legislation or regulation. Governments honestly love this shit. Its like catnip. And if you had 1 tiny look behind the curtains of a merchant credit card processor, you would see that they would abandon this level of compliance at the drop of a hat were they permitted. The glue that holds the whole thing together is the restricted access to global Visa and Mastercard payment processing. If you think all this is trivial, demonstrate how trivial it is, and spin up your own cards, card payment platform, various interconnects and clearing houses. I think you would much more quickly assemble a working computer out of a kids sandpit. Shit I remember a bunch of crypto projects sought to replace Visa and Mastercard, the best we got was Crypto branded Visas and Mastercards.
dilyevsky 9mo ago
Yes and a missile is just a big can of propellant. It’s not complicated
weddpros 9mo ago
Hosted on Amazon and Digital Ocean from what I can tell
alex43578 9mo ago
What they're doing is a combination of the network effect and fronting a financial risk. The value comes from their ability to intermediate billions of dollars in transaction volume a month. It's not that tough to understand why they are valuable.
raincole 9mo ago
It's obviously very difficult. Just not necessarily difficult in technological sense. Convincing your neighbors to build a refugee shelter in your neighborhood is difficult, and it's not like we have a shortage of house-building knowledge.
tlogan 9mo ago
I think what people are missing in this conversation is fraud prevention and protection. Any cross border payment solution, even within Europe, that lacks strong fraud protection is dead on arrival. But I suspect the fraud problem will be ignored until it cannot be ignored anymore. And then we will go back to square one and try everything again.
TimByte 9mo ago
If Europe wants its own rails, that's a policy and economic decision not a technical impossibility

ajb 9mo ago

Each individual detail isn't difficult, the moat is dealing with a huge, huge, pile of them. But most of the details are driven by laws and regulations: of the entity in charge of those things decides it doesn't want you to have a moat any more, you've got a problem. If there's one thing the EU really does have, it's the capacity to revise regulations.

arghwhat 9mo ago
Rather than a moat of details, it's first-mover advantage. Anyone can run a credit card network, but merchants and banks need to support them. Many others exist, but the issue is that they don't have widespread adoption. Solutions that work exist, which means the lesser supported alternative is not widely used, which again reduces reason for wider adoption... Regulation changes "why bother" to "oh crap".
- black_puppydog 9mo ago
  jup. once this is built, if adoption is lacking, it's not hard to imagine how the EU could make it the standard payment option.
saubeidl 9mo ago
> If there's one thing the EU really does have, it's the capacity to revise regulations. This is the central power lever of the EU and one that is frequently underestimated. European power projection doesn't work through tanks and aircraft carriers. It works with regulations, trade deals and economic incentives. Remember how a few years ago everyone was scrambling to get GDPR-compliant? That wasn't some random event. That was the EU projecting power. Why do iPhones have USB-C now? European soft power. Why are things like Champagne and Prosciutto di Parma protected brands that can only be sold if they're from the actual region? And I mean not just in Europe itself, but everywhere it has deals? Canada, Japan, India, China, Mercosur, etc etc? European soft power. The EU is playing a different game from the other major players. Not one of brute force, but one of shifting the foundational rules of commerce in their favor. And they're very good at it.
- notahacker 9mo ago
  Yep. And whereas the EU can't magic itself into having enough fossil fuels or bootstrap a commercially viable reusable rocket launch industry overnight, it absolutely can align payments legislation and mandate that point of sale devices accepting Payment Provider I in Europe should also accept Payment Provider II...

ericmay 9mo ago

> No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect. I don't know that the problem is sophisticated, but it's certainly complex [1]. It's a bit of both in terms of complexity and defending a moat, which all businesses do, including, and especially European ones. And companies like Visa, Mastercard, American Express, &c. arose initially from solving a real need. Before these companies came into existence when you traveled you'd have to take cash, or traveler's checks or some other nonsense. Today you can, at least as an American, just walk in to the subway in just about any country and tap to pay. Need a coffee at Mt. Fuji? Easy. Buying a bottle of Calvados in some remote area? Yea just tap to pay with your Mastercard. > Time to do away with these foreign entities. You'll never do that. Why? Because at a minimum you want American tourist dollars and Europe isn't going to start issuing European credit cards to Americans or other citizens around the world. [1] Why is it complex? Well you have to deal with American and European financial regulations, KYC, &c. - you have to vet merchants, you have to run the infrastructure to process transactions, refunds, direct payments from bank accounts to pay for cards, and all of those things. Those are real, genuine business activities that are non-negotiable and while they may seem simple, in practice they are not at all simple.

raverbashing 9mo ago
About your point in [1] yes it is complex but maybe 50% is done by the issuing bank/institution And people do underestimate the complexity of it
joevandyk 9mo ago
This last summer, I couldn’t use my US-issued Visa or Mastercard credit card in most places in the Netherlands. Had to use debit.
- volkl48 9mo ago
  Literally just got back from a trip there and didn't find a single business or transaction that I couldn't pay for with various US-issued (Chase + BoA) Visa credit cards via tap. Even more surprisingly to me - a pretty decent chunk of businesses even would accept AmEx. By no means all, but I recall it being basically nonexistent not that long ago. And to be clear - much of my time was not in areas that get a ton of foreign tourist visitors. Not saying your experience didn't happen, but given our very different experiences it might be something with your particular bank/issuer/card?

havaloc 9mo ago

I think it's probably a little bit harder than you think with all the rules and regulations out there. I would highly encourage anybody who's remotely interested, listen to the Acquired podcast episode regarding Visa. It's actually quite fascinating how it was started. You may balk at the length, but the whole thing had me interested. https://www.acquired.fm/episodes/visa https://www.acquired.fm/episodes/visa

unmole 9mo ago
India built RuPay, China built UnionPay. There's no reason why Europe can't do the same.
- psychoslave 9mo ago
  France still has CB https://en.wikipedia.org/wiki/CB_Bank_Card_Group https://en.wikipedia.org/wiki/CB_Bank_Card_Group
  - Beretta_Vexee 9mo ago
    There are equivalents in several European countries. The problem is that these networks are national and not European, let alone global. National banking players did not want to give up their turf. The European Union had to twist their arms to get them to agree to SEPA transfers, instant transfers, etc. If banking players cannot agree, then regulation (or the threat of regulation) must be used.
    - psychoslave 9mo ago
      Well, yes, but it happens that European directives do happen and are actually followed or enforced. Without laws there would be no bank in the first place, neither at national or paneuropean level.
  - clownpenis_fart 9mo ago
    CB actually have higher security standards than visa. I once worked at a company doing payment card personalization (its the company who turn blank smart cards into finalized cards on behalf of banks. They print the customers names, emboss the account number, and program the chip and the magstrip) Every year they had comprehensive security audits from Visa, Mastercard and Groupe Carte Bleue. One guy there told me that they did the Groupe Carte Bleue audit first, because its the toughest. If they passed it they were sure to pass the others.

bparsons 9mo ago

Canada has had the INTERAC payment system for over 20 years now. It is privately run by Canadian banks, universally accepted and runs on a cost recovery basis.

swat535 9mo ago
So there are 3 kinds of "debit cards" in Canada: 1. Debit Mastercard/VISA. These are Debit Cards that use the Mastercard/VISA communication system to process transactions. While they are not "Credit" cards because you are using cash in an account that is your money, they rely upon the VISA/Mastercard system and merchants will be charged the Mastercard/VISA fee like a Credit Card. 2. Interac Debit Card. Interac was the first company to offer a debit card type system in Canada, and they are the traditional bank card. These cards use the Interac system (so does eTransfer) and Merchants are charged by Interac for using the system. Its typically less than Mastercard/VISA, which is why you see these "Debit Card only" signs. 3. Mastercard/VISA and Interac hybrid cards. These are newer and combine both Mastercard/VISA and Interac cards in one. The merchant can choose how they want to proceed. Most of these "Debit" only signs are really saying "Interac only", but because for 30 years Interac was the only provider of Debit cards in Canada, it became the common vernacular to say "Debit" when you mean "Interac".

soared 9mo ago

Required Dropbox comment: https://news.ycombinator.com/item?id=9224 https://news.ycombinator.com/item?id=9224

direwolf20 9mo ago
What about it?

jlarocco 9mo ago

I can't disagree that they have a moat, but it's a hard problem and if it were as easy as you say somebody would be disrupting them already to get a share of that $24T. Just dealing with fraud is a major problem in itself.

direwolf20 9mo ago
Fraud is mostly resolved by the two banks involved. The network is just that, a network.
- tlogan 9mo ago
  The problem arises when the banks are in two different countries. If money leaves your account and mistakenly ends up in an account in another country, even within Europe, it can be very difficult to recover. That is why national payment systems tend to work relatively well. Cross border systems are a completely different challenge.

ajsnigrutin 9mo ago

The problem here is interoperability. Now most merchants have to work with two companies, visa and mastercard. Want to accept russian MIR cards? Well, in some countries you're not allowed to, and in some, you must, since visa and mastercard don't work there. Now if you add a european company to the mix... whill their cards get accepted in south africa? What about in eg turkey? China? Will whatever indian alternative is get accepted in france? Currently, with a visa and mastercard, except for maybe russia and iran, you're pretty sure it'll get accepted at least somewhere in any urban area you visit, so you won't be hungry and have somewhere to sleep. If my bank replaces my mastercard with the EU alternative, I won't be that confident about that for quite a few years. On the other hand, cash is still the king of everything everywhere... somehow some politicians are trying to get rid of that for some reason.

account42 9mo ago
Most merchants don't work with Visa and Mastercard, they work with payment processors like Fiserv, or other middle men even further removed from the card networks, that already abstract all the different cards (including existing local debit cards) away into a unified flow.
- ajsnigrutin 9mo ago
  Sure, there's a gajillion of those processors all over the world, and they somehow all work with mastercard and visa. Diners club? Well.. "it depends". Many don't work with it. Indian, russian, chinese, cards? Maybe in india, russia and china, but you shouldn't expect it to work "everywhere" like visa and mastercard. Same will be true for EU cards for quite a few years, especially if the system gets fragmented into many different companies using many different systems, and you'll always wonder if your german card will get accepted in Algeria like your friends' french card is.
wiseowise 9mo ago
> Want to accept russian MIR cards? Thankfully, this use case has been solved by Russians themselves.

tiffanyh 9mo ago

Creating Acceptance is super difficult. Hence why crypto hasn't taken off with merchants. Because who's going to pay for merchants to change their point-of-sale systems to accept a new payment method.

autoexec 9mo ago
If the entirety of Europe comes up with a single system I think that'll be more than enough incentive for merchants to update their pos software to accept the new network. I hope that they are eventually so successful that merchants here in the US support them too. I'd love to stop using visa and mastercard.
- tiffanyh 9mo ago
  You mean like Pix in Brazil, or UPI in India.
direwolf20 9mo ago
Crypto is also a shit payment method though. Expensive and difficult to run and with high transaction fees. And if you use a chain with low transaction fees, there's no consensus on which chain that is (otherwise transaction fees would be high) so you have to support all of them. Then you might as well outsource the whole thing.
- SenorKimchi 9mo ago
  I have done some work at crypto exchanges so I am a bit biased. I would agree that BTC and many assets are a terrible payment method due to poor UX (block time, clunky wallets), speculation, and wild price swings. But crypto in general works well for payments I would say. Transaction fees have improved significantly where it can be on the order of a few cents per transaction. So yes this is a little high for a $1 candy bar but this is fantastic for a $1,000 watch. The number of chains and interoperability is a bit of a pain at the moment, but this problem can be resolved by delegating to a payment processor, or simply targetting ETH, the top stablecoins, and BTC which account for the vast majority of the market. > Expensive and difficult to run Again I am biased because of my experience, but I could set up a payment gateway for ETH in a few hours using free public nodes at virtually no cost. No business overhead. No agreements with payment processors or card companies. The biggest cost and overhead ends up being accounting, because crypto still has ill defined laws and regulation.

BurningFrog 9mo ago

If you gave any argument for why and how this is true, I might have believed it.

eastbayjake 9mo ago

I'm a little shocked that of all the comments so far, no one has mentioned the financial risk borne by this whole value chain. OP is operating as if it's just a debit system moving money from one account to another but: - For many consumers there isn't sufficient money in the account to settle all the one-time and ongoing transactions they are liable for -- credit cards are giving you a revolving loan, there's risk it will not be repaid, and that risk ends up reflected in processing fees - For many _businesses_ managing cash flow is existential -- as merchants they want to be paid as quickly as possible, but as B2B customers they want to have 30-60 days to sell the input goods they've purchased so they can pay for them upstream. There is a premium for that flexibility that gets reflected in processing fees. - For both consumers and merchants, fraud risk is real and while it's the most solvable part of all this it's a real (and costly!) factor today. That risk for fraud gets moved upstream to the networks/acquirers/processors/issuers and that premium shows up in (you guessed it) processing fees. If you want to switch the world to a debit-based system where economic transactions are limited by cash on hand, I'd argue that's a poorer and less dynamic world than the one we're operating in today.

functionmouse 9mo ago
I shouldn't have to pay for your usury economy if I'm using cash. If that were really the issue, these companies would have no problems with businesses charging different prices or offering discounts for cash.
- eastbayjake 9mo ago
  The networks allow cash discounts if it's posted clearly and the customer has an option to use a different payment method -- you see this on every gas station sign alongside every highway in America. (What's _not_ permitted is adding a secret surcharge or item mark-up for credit card payments)
  - bombcar 9mo ago
    The latter is allowed now - after the backs of the credit card processors were broken. They fought tooth and nail against cash discounts OR credit surcharges and they finally lost. In some areas it's rampant that you get a pretty substantial discount - often 4 or 5%, better than cash-back - and many places post "cash prices". You can get even more if you're willing to ride the hassle of the gift card train. The credit card companies know people spend more if they use credit cards, and they turn around and sell that to the merchants.

instagib 9mo ago

Then the vendors pay 2-4% of credit transactions to the payment processor or shift the cost to consumers. It’s about the cost of another employee in salary per year for restaurants. While many other countries employ pay by QR code which is free.

bitcurious 9mo ago
> While many other countries employ pay by QR code which is free. In which countries is this service free? Alipay and Wechat are probably the biggest actors in this space both take a cut.

dwroberts 9mo ago

It’s a little bit of both right? They’re entrenched yes, but it’s not technologically trivial either. The operations they do for each account might be simple but the shear volume of transactions they handle is enormous. The scale makes it complicated.

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codyb 9mo ago

Sounds like you should build a competitor if that's literally all it is... I suspect there's quite a few other things you have to consider when you're managing trillions of dollars of transactions a year. Fraud, settlement times, up times, security, customer service, debt collection, interest rate calculation, reach, KYC, record keeping, legal inquiries. But I'm sure we're just a couple grok comments away from a competitor

tflinton 9mo ago
Don't forget stand-ins, much of this hasn't discussed that credit card networks do a lot of "stand-ins" when the issuer is unreachable (bank goes down, latency too high, etc). It's a bit unclear how things like Wero would operate when a network issue hits as Wero and EU rails won't just assume the liability for the transaction and hope it clears later as it does on Visa/Mastercard.
resonious 9mo ago
Very good examples. I'd add that Trust and connections are also huge in payments. Even if your technology is perfect, you need to integrate with tons of different systems to get full coverage, and the people who run those systems don't sign contacts with just anyone.

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olalonde 9mo ago

It's not a technology problem. It's a problem of being compliant with vague government regulations (e.g. AML/KYC) and getting banked (which is very difficult... thanks to perceived AML risk).

jstummbillig 9mo ago

> I always find it entertaining to hear people try to argue that what these companies do is soooooo difficult and that's why they're valuable. It's just multiple computers keeping a balance. Roughly nobody argues that part is difficult. > It's not complicated. It's very complicated, for the reasons that all complex real world systems are. It's an absolute mess. > Time to do away with these foreign entities. I don't really mind the "foreign" part, but it's fairly wild that essential financial infrastructure is privatized, so let's!

bob1029 9mo ago

The #1 thing you're paying for with Visa and the others is uptime. Knowing the card will always work 24/7/365 with such a high degree of assurance is a non-zero factor in how well a consumer economy performs.

simplyluke 9mo ago

> It's just multiple computers keeping a balance. It's not complicated. It wouldn't be hacker news without a comment like this. I haven't personally worked in finance, but I've had a lot of friends do it. It _absolutely_ is complicated. It's not too complicated for a nation or the EU to do it in house, but no, there's a bit more there than "Claude make me a ledger"

otterley 9mo ago
My usual response to claims like this is “if it’s so easy, why haven’t you done it yet?”
- Supermancho 9mo ago
  Trolling is not insightful. A number of other companies already have "done it" and are in use across the world. The question is why aren't western nations ALL using alternates yet? The article is pointing out that a new attempt is gaining political momentum, which answers the question.
  - otterley 9mo ago
    Those alternatives are not worldwide payment networks with near-universal acceptance. They’re scoped much smaller. Even then, those independent efforts have either been implemented by law as a political strategic measure or are subsidized. They wouldn’t exist but for those supporting elements. Having federated payment networks may be good politics, but it’s not particularly efficient and it impedes world trade. At any rate, making someone who haughtily trivializes a problem solve that same problem is a useful exercise both in the complexity of the subject matter, and—perhaps more importantly—in humility.
  - NoPicklez 9mo ago
    > It's just multiple computers keeping a balance. It's not complicated. I'd argue this was the trolling
Sebguer 9mo ago

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danielodievich 9mo ago

I very distinctly remember a dev talk at early 2000s Microsoft where a distinguished engineer recently come to MSFT from VISA described the herculean effort that it took to run this network. There was an anecdote that he shared that stuck with me where they had a worldwide daily balance mismatch of something like 0.37 cents and it was all hands on deck to find the missing thing. Yeah, man, it is very difficult to run these networks, hence so much money in it.

csomar 9mo ago

The fact that Asean and India did it, just like that, shows that the technical difficulty is no longer the issue. Visa and Mastercard exists because of US hegemony. The Europeans just put their heads in the sand for a long time and accepted the "superiority" of American payment solutions because it benefited their geopolitical play at the time. Some sources (Old and New): - https://www.reuters.com/business/finance/exclusive-visa-complains-us-govt-about-india-backing-local-rival-rupay-2021-11-28/ https://www.reuters.com/business/finance/exclusive-visa-comp... - https://jakartaglobe.id/business/indonesia-expands-qris-reach-despite-us-trade-pressure https://jakartaglobe.id/business/indonesia-expands-qris-reac... - https://www.china-briefing.com/news/wto-china-unionpay-ruling-paves-way-for-visa-mastercard/ https://www.china-briefing.com/news/wto-china-unionpay-rulin... - https://valorinternational.globo.com/foreign-affairs/news/2025/07/16/us-targets-pix-in-probe-into-brazils-unfair-trade-practices.ghtml https://valorinternational.globo.com/foreign-affairs/news/20...

protocolture 9mo ago

>I always find it entertaining to hear people try to argue that what these companies do is soooooo difficult and that's why they're valuable. It's just multiple computers keeping a balance. It's not complicated. Honestly its a few things. No, the technical and financial implementation is quite complicated. Its not just a balance in a database. Yes, they do maintain control through a vertically integrated business structure. But its very easy to justify due to risk management. >No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect. The moat is the difficulty. And they do protect it. Theres a common type of customer in IT who thinks they can do everything themselves and the "finding out" phase of their shenanigans is often extremely costly, not just for themselves but for their customers. The chief product of a good supplier is not just software or technical services, its the regimented and disciplined implementation of those services. Some people will pay more for an IT provider who permits less because they lack the internal organizational discipline to do these things correctly for themselves. As far as various governments are concerned, the payment card industry is largely self regulating. And that's because the apex card providers provide the balance of enforcement downstream to all the nitwits who would otherwise have to be stung by hundreds of security lapses before they would otherwise respond. The PCI SSC has created an environment where data security is more restrictive than most polity's would require, and its standards are applied worldwide. Often people get liability exemptions for meeting this standard, rather than the standard itself being enforced by legislation or regulation. Governments honestly love this shit. Its like catnip. And if you had 1 tiny look behind the curtains of a merchant credit card processor, you would see that they would abandon this level of compliance at the drop of a hat were they permitted. The glue that holds the whole thing together is the restricted access to global Visa and Mastercard payment processing. If you think all this is trivial, demonstrate how trivial it is, and spin up your own cards, card payment platform, various interconnects and clearing houses. I think you would much more quickly assemble a working computer out of a kids sandpit. Shit I remember a bunch of crypto projects sought to replace Visa and Mastercard, the best we got was Crypto branded Visas and Mastercards.

dilyevsky 9mo ago

Yes and a missile is just a big can of propellant. It’s not complicated

weddpros 9mo ago

Hosted on Amazon and Digital Ocean from what I can tell

alex43578 9mo ago

What they're doing is a combination of the network effect and fronting a financial risk. The value comes from their ability to intermediate billions of dollars in transaction volume a month. It's not that tough to understand why they are valuable.

raincole 9mo ago

It's obviously very difficult. Just not necessarily difficult in technological sense. Convincing your neighbors to build a refugee shelter in your neighborhood is difficult, and it's not like we have a shortage of house-building knowledge.

tlogan 9mo ago

I think what people are missing in this conversation is fraud prevention and protection. Any cross border payment solution, even within Europe, that lacks strong fraud protection is dead on arrival. But I suspect the fraud problem will be ignored until it cannot be ignored anymore. And then we will go back to square one and try everything again.

TimByte 9mo ago

If Europe wants its own rails, that's a policy and economic decision not a technical impossibility