8 ms·

Payment fees matter more than you think

102 points by dxs 7mo ago

ezfe 7mo ago
4% seems high. Quick googling in the US (which has high rates) shows 1.5-3.5%, avg of 2%
- Groxx 7mo ago
  You might be surprised to hear that my small business sometimes sees fees at 11%. We blocked that card processor, obviously. But the % is very much not constant across e.g. Visa, often every purchase in a day is slightly different, and we can't even tell people what the rate is for their purchase due to a couple layers in between (still figuring out if we can fix that). It's vile, and probably should be illegal to not pass through the cost visibly.
  - ezfe 7mo ago
    Stripe is 2.9%+30¢ right, and that’s the advertised rate. So I assume any business seeing averages higher than that can be avoided by using a platform like Stripe.
    - Spooky23 7mo ago
      Small merchants are people, and people vary in their intelligence/savvyness and may have other issues like poor credit or high chargebacks that they usually forget to mention. Some people roll the cost of the terminal into a higher fee as well. I helped out a friend who owns a deli when he took over from his parents. His dad saw cash as a way to avoid taxation and had some awful payment processor where they paid a high fee and was renting a POTS based terminal - $60/mo to Verizon and $30/mo for the terminal. Now he keeps one set of books, and raised his average sale by about 10%. Their catering business, which drives profits, are up significantly with online ordering through the POS. Ditto with a non-profit I was on the board of. Pushing Venmo and Square for donations increased donations by like 30% and reduced shrink at fundraisers. Anyone who claims they can’t afford a 3% fee is going out of business anyway.
    - havaloc 7mo ago
      The Stripe rate is a careful blend. There are many cards that are cheaper to process and there's probably a few that are more expensive to process at that rate, it works out in the wash in favor of Stripe. Also, that 30 cents is a large percentage if you're looking at a $5 transaction, for example (6%!) See the "raw" rates here: https://www.mastercard.com/content/dam/mccom/us/business/documents/merchant-rates-2025-2026.pdf https://www.mastercard.com/content/dam/mccom/us/business/doc...
  - fragmede 7mo ago
    Why not just pay Stripe/Adyen/Braintree to smear the fees to 2.9% + $0.30?
  - Groxx 7mo ago
    To respond in bulk: > complaint: credit card fees are high and maliciously opaque. > suggestion: have you considered adding another company in the middle? ... do y'all understand that those middle companies profit from being in the middle? that profit comes from somewhere, where oh where could it be... why on earth would you expect them to improve your income? you are literally buying convenience from them. or is this just thinly disguised advertising?
- MengerSponge 7mo ago
  There are a few cards that offer 2% cash back with no annual fee. No chance their fee is 1.5-2%
  - wccrawford 7mo ago
    Cards don't make money from their fees. They make money from people who fail to pay and then pay the ridiculous interest.
    - apparent 7mo ago
      Do people who pay ridiculous interest qualify for 2% cards? Honest question; I don't carry a balance so have no idea what is advertised at other types of consumers.
      - SoftTalker 7mo ago
        Why not? I'd gladly pay you 2% of $1,000 if you pay me 21%
        apparent 7mo ago
        I was just under the impression that the cards with the best benefits were somewhat harder to get. I do understand that credit card companies make money on interest and late fees, so they should find consumers to be attractive so long as they ultimately pay the bill/interest. I guess the question is whether they can distinguish between people who are going to carry a balance but ultimately pay and people who are a true default/bankruptcy risk.
      - fn-mote 7mo ago
        What matters is their credit rating, not how much they carry as a balance. (However, that can affect their credit rating.)
    - bumby 7mo ago
      Interchange fees seem to be a sizable portion of revenue. Discover has listed them as 29% of revenue, BoA at ~$10B annually…
konschubert 7mo ago
In the EU, we now have instant, free SEPA bank transfers. I know that the banks are trying to build a payment solution on top of this technology but it's not really getting traction. I am wondering if there is a way to bootstrap something bottom-up by offering something to merchants that has a clear value prop.
- HoldOnAMinute 7mo ago
  There is always opportunity in FinTech. How did Venmo and Cash app get any traction? After all, we already had PayPal. There was already a way to transfer money to your friends. How did Robinhood get any traction? We already had Etrade and other online brokers.
  - yobbo 7mo ago
    Usually by giving away free money to reach critical mass.
- mrweasel 7mo ago
  Probably not worth it, given that the EU caps the credit card fees at 0.3%, 0.2% for debit cards.
  - llsf 7mo ago
    Well the cap is only on the interchange fee, there are several other fees to add to it... example: https://www.adyen.com/pricing https://www.adyen.com/pricing Processing a Mastercard card is "$0.13 + "Interchange+" + 0.60%" where the "Interchange+" would be 0.30% for EU. So more like €0.10 + 0.90% so for €10.00 product, it would be €1 of fee (1.00%). Much less than here in US, but still not negligible for small businesses that run on thin margins (and 20% VAT).
    - fn-mote 7mo ago
      Looks like you missed a decimal. 0.9% of 10.00 is 0.09 so the fee is 0.19 euro on a 10 euro purchase.
ralferoo 7mo ago
Wechat pay in China is interesting. It costs nothing to add money to your balance from your bank, or to pay someone from your balance. It only costs the end merchant who wants to withdraw it from their balance back into their bank. If they can keep it in Wechat pay and spend it on other things (which is very easy as it and Alipay are the primary payment methods for everything), then there's no charge. I guess Tencent are making their profit from the interest they earn on the money that was transferred into them that just stays in people's Wechat wallets in effectively a parallel currency.
- mihaelm 7mo ago
  And no doubt they’ll find a way to spend it in the app considering you can manage almost all aspects of your life within it. Revolut works similarly. You don’t pay any fees on transfers to other Revolut accounts, but you do for other bank accounts.
  - johneth 7mo ago
    > Revolut works similarly. You don’t pay any fees on transfers to other Revolut accounts, but you do for other bank accounts. Does it? I'd be surprised if it does in the UK at least, as all banks do free transfers to every other bank in the UK via Faster Payments. I thought it was the same in the EU?
    - ralferoo 7mo ago
      Agreed. In the UK, I've never been charged a fee to send money within the UK on Revolut.
- mitthrowaway2 7mo ago
  Well, that definitely creates a powerful pull from customers to make vendors accept Wechatpay for transactions.
touwer 7mo ago
It's time for Europe to process the own money. Strange that the dominance of Visa/Mastercard/Maestro was left for so long. Of course there is a lobby from them to attack the digital Euro
deleted 7mo ago
[deleted]
Finnucane 7mo ago
One factor that the author glosses over a bit is that highest swipe fees are for credit cards with benefits. The interbank system he describes is a debit system, no credit is being extended. Even in the US, debit swipe fees tend to be less.
saharshpruthi 7mo ago
In India there is UPI (Unified Payment Interface), which works with all bank accounts, it's facilitated by the Government and it comes with i. QR Code (Used with strangers and at Merchants) ii. UPI ID iii.And links to phone number. Anyone can pay to anyone instantly free of Charge. Only limit is it's limited to ~ $1000 payment. The QR code can also be dynamically created by POS terminals containing the total bill amount as well, so upon scanning the amount is auto populated in the payment app, you just have to enter the security pin. And since it's a Govt. Project, its not limited to just one app, there are lots and lots of apps working on the same system. There is even a VISA/Mastercard credit alternative : RuPay that works within the system.
- 0x5FC3 7mo ago
  Its limited to about $1000 a day. The QR is a URI with the ID, amount and maybe other stuff. It's a client-side implementation. RuPay sure "works within the system" but is pretty much useless for international payments/subscriptions. Not really a VISA/MasterCard replacement.
  - bigfishrunning 7mo ago
    So people scan a QR code, and then enter a secure banking pin? this sounds like a security problem waiting to happen...
    - wiradikusuma 7mo ago
      The QR code doesn't open a link. It's just "gibberish" text only usable by app that can understand it (e.g. banking apps). (I don't know anything about UPI, but in Indonesia we use a similar system)
      - Imustaskforhelp 7mo ago
        I am Indian and I think what you are saying is correct. It opens up the banking app or in our case UPI providers app so like Google pay, Phonepe,paytm, Bhim UPI and other such apps.
montenegrohugo 7mo ago
Shameless self-promo: We've been working for the last two years on making money movement free. We use ethereum (and stablecoins) for that, and integrate with the novel real time payment networks like PIX, Wechat, Yape, Mercadopago and so on. We're still orders of magnitude smaller than Visa and Mastercard, but I do believe products like ours (and competition is red hot here, theres so much good choice!) will be good for consumers. Money should be like a message: free and instant We're open source btw, happy to show off codebase and review PRs https://github.com/peanutprotocol/peanut-ui https://github.com/peanutprotocol/peanut-ui https://peanut.me/ https://peanut.me/
- Imustaskforhelp 7mo ago
  What I want is being able to pay stablecoin from my side and be able to esentially get a virtual card of payment. The only way which has worked for me was actually using g2a with their crypto provider to get a 10$ gift card of rewarble and activate it. Does your app allow something like this? can I convert any crypto to payment provider which can be accepted from the other side or am I reading it wrong because you do mention PIX, if it can work with PIX, does it work with VISA/Mastercard cards too?
  - konradurban 7mo ago
    not exactly. peanut has banking relationships for fiat withdrawals and deposits, where the usdc gets sold for usd or reales or pesos or whatever seamlessly. anyway, what this means is that you can send funds to anyone in the world in milliseconds, for free. they can then move the funds to their bank easily
flaxxer 7mo ago
[dead]
intrasight 7mo ago
Why not FedNow?
- builder36 7mo ago
  [dead]
- llsf 7mo ago
  You mean the thing that launched in 2023 and that is still not widely deployed ? My BoA still prints checks and mail them to the US Bank across the street when I have to pay my HOA. So yes, why not FedNow... BoA and USBank ?
- tryptophan 7mo ago
  Its been interesting how much of a nothingburger fednow ended up being. Lack of adoption probably because it seems to function just as a faster ACH, without any of the UX improvements systems like Pix, UPI, blik, etc have...
kwanbix 7mo ago
In Argentina we can transfer using our account number (or account Alias, for example my alias could be kwanbix) directly, account to account, instantly, it costs 0.
- llsf 7mo ago
  In US also... but here in US, my bank (Bank of America) would print a check, put it in an envelop, send it to the other bank (e.g. US Bank). So, it is not instantaneous, but it is still free. The drawback is when the US Bank office down the street that hosts the account closed for water damage, it stopped receiving the checks, and it took forever to bounce, so I had no idea that I was not paying my HOA... And this happened in San Francisco, California where the Bank of America and the US Bank are on the same street, a block away... I cannot wait for FedNow or anything trying to fix this mess.
wagwang 7mo ago
Let's just call it for what it is. Visa and mastercard innovated in an era where payment settlement was notoriously difficult and expensive but they've used their monopolies to entrench themselves in (by negotiating deals with merchants and bribing consumers with points) while the rest of the world moves on towards "layer 2" payment systems that are much cheaper and efficient.
- jen20 7mo ago
  The real thing consumers get is fraud protection, and the ability to charge back when merchants become intransigent. Let's not pretend other systems (even the ones prominent in the US like Zelle) offer the same protections.
  - wagwang 7mo ago
    That's cc propaganda; merchant fraud is a tiny portion of the overall transactions so you'd save more overall if the cc fee wasnt passed onto the consumer. The counter argument is that the aggregate data allows payment processors to ban merchants if they are bad actors. But the counter to the counter is that the level 2 payments work very well in other countries (some with a lot more fraud) and data aggregation/centralized ban power is bad.
    - jen20 7mo ago
      I have personally charged back a transaction (not fraud per se, but certainly not a service delivered) in the last month. It's not just about merchant fraud, it's about holding businesses to account in a world where individual consumers are increasingly powerless.
  - ShowalkKama 7mo ago
    >The real thing consumers get is fraud protection I don't need fraud protection and the ability to charge back when lunch at a restaurant, I just need a skimmer-resistant payment method (which a phone is).
    - 7mo ago
havaloc 7mo ago
If a restaurant runs on a 9% net margin and pays around 3% in card fees, then roughly one-third of its net profit is going toward payment processing.
- matsemann 7mo ago
  It's weird how this works. Saw something similar when working for a bus company. After reaching a minimum amount of sales for a bus route, everything after that is basically pure profit. However, how do we get those last sales? Well, by bidding higher on people searching for transfer between those two cities. Let's say the ticket was $20. We could end up for instance accepting to bid $10 for an ad that would lead to a sale. So for every $10 of pure profit we then got, Google also got $10. In a sense it was a good deal for both parties, but it's also kinda insane that in the end, Google made as much profit on our busses as we did.
- carlosjobim 7mo ago
  If they're running on 9% net margin, then card fees are pretty down on the list of problems. They're vulnerable to any kind of fluctuation.
  - Marsymars 7mo ago
    Yes, restaurants in general are vulnerable to any kind of fluctuation.
    - carlosjobim 7mo ago
      They are. But it's misdirected to blame card fees, when they're so tiny. If anything, they are benefitted by accepting cards, since they get customers who purchase on credit. Or just in general because many people have less resistance towards making a card purchase compared to a cash purchase.
crazygringo 7mo ago
This article is missing some important aspects/context: > If the card processing cost is 4 percent of the sale price, the fee amounts to $6. That $6 is not 4 percent of the profit; it is 12 percent of the merchant’s margin. Sure, but merchants are raising prices overall together with all their competitors, or charging more when using a card. Credit cards aren't taking away 12% of merchants' profits that they'd keep otherwise. Also, credit card fees are not 4%, they're 1.5-3.5% with an average of around 2.3%. > The merchant may pay little or nothing per transaction, the funds usually arrive immediately and no physical terminal is required. But what's missing here is fraud protection. It's more like debit cards than credit cards, and debit card transactions are much cheaper in the US too (more like 0.7%). Now that it's increasingly common for local merchants to implement a credit card surcharge (so non-CC users don't have to pay more), and a large percentage of credit card fees come straight back to the user as rewards (e.g. a 2% cash reward), it's not really clear that payment fees matter all that much in the end. See: Fed Data Shows Economics of Interchange: 86% of Fees Fund Rewards Programs: https://www.pymnts.com/news/loyalty-and-rewards-news/2025/fed-data-shows-economics-of-interchange-86-percent-of-fees-fund-rewards-programs/?utm_source=chatgpt.com https://www.pymnts.com/news/loyalty-and-rewards-news/2025/fe...
- Reason077 7mo ago
  > “Also, credit card fees are not 4%, they're 1.5-3.5% with an average of around 2.3%.” And they’re much lower than that in the UK and EU. Even the smallest UK retailers can pay as low as 1.6% or 0.8% + £0.02. The big guys who are running billions of £ are paying 0.5% or less. (These apply to in-person transactions, accepting cards on the internet typically costs more).
- AnthonyMouse 7mo ago
  > Sure, but merchants are raising prices overall together with all their competitors, or charging more when using a card. Credit cards aren't taking away 12% of merchants' profits that they'd keep otherwise. That depends on the market. Suppose you're selling something which has a substitute available for the same price, so the customer will buy whichever one costs less by any amount, but the substitute is in a different market where the payment is in the form of a bank transfer or it's a tax deduction etc., or the substitute is paid for in time rather than money. Then none of the sellers accepting credit cards can raise the price because otherwise the buyer would go to the substitute. And all markets are like that to some extent. For some the seller can't raise the price by a cent without losing 100% of their sales. For others, raising the price would "only" cost them 5% of their sales... but that's still 5% of their sales gone, and all the same fixed costs to cover. And, of course, in the cases where the price goes up, now it's the customer eating the fees, which is fairly nefarious when it's being subtly hidden from them. > Also, credit card fees are not 4%, they're 1.5-3.5% with an average of around 2.3%. Stripe is 2.9% + $0.30. For a $10 transaction, that's 5.9%. For a $3 transaction it's 12.9% -- of revenue, not profit. > But what's missing here is fraud protection. "Fraud protection" is is independent of the fees. You're making the case for that yourself -- if 86% of the fees go to rewards programs then they could be reduced by 86% without affecting "fraud protection", and the rewards programs are a wretched thicket of dark patterns and unpaid interest scams taking advantage of people who are bad at math or too short on time to configure them efficiently, on top of a tax on lower income people who don't qualify for them. It's also not clear why "fraud protection" should cost anything. The bank has no meaningful way to investigate a low dollar amount he-said she-said and the high dollar amount ones should be going to the actual court system, so why should they have anything more than a set of rules (e.g. which transactions are eligible, how long you have to file a dispute) under which you can make a request to have them flip the bits back in their computer for free?
flerchin 7mo ago
Payment processing networks are not free to build or operate. There are necessarily fraud controls and transaction reversals that require human oversight. This all costs. Nations can and should build this infrastructure, but in the absence, a payment processor is going to charge interchange. Otherwise why would they bother.
- Retric 7mo ago
  Uninvolved companies wouldn’t bother, but outlaw such fees and lenders would still build this kind of infrastructure so they could make money charging people interest.
pjdkoch 7mo ago
/me looks around in stablecoins This is a pretty solved problem.
MoonWalk 7mo ago
"...backed by formidable fraud protections" Laughable, at least in the USA. It took decades for us to finally get cards with chips in them, and when we finally did... the issuers "forgot" to implement the other half of the equation: PINs. "Chip-&-PIN" was standard through the rest of the industrialized world for ages, while card companies abetted theft in the USA by neglecting to implement PINs.
arkmm 7mo ago
Payment fees are crazy when you think about them from the perspective of a merchant in a low margin business. E.g. in retail or restaurants, margins aren't much better than ~10%. If they didn't have to pay ~3% credit card fees, they'd have 30% more profit!
samrus 7mo ago
Pakistan has this government facilitated payments infrastructure called Raast. Its not private, so it work directly from bank account to bank account. It works great, and avoids vendor lockin. This plus the mobile wallet boom (basically mini bank accounts with far less barrier to entry) means you can now pay quite a few (unfortunately not most yet) normal street vendors with this. I think thats a great system

102 points by dxs 7mo ago

ezfe 7mo ago

4% seems high. Quick googling in the US (which has high rates) shows 1.5-3.5%, avg of 2%

Groxx 7mo ago
You might be surprised to hear that my small business sometimes sees fees at 11%. We blocked that card processor, obviously. But the % is very much not constant across e.g. Visa, often every purchase in a day is slightly different, and we can't even tell people what the rate is for their purchase due to a couple layers in between (still figuring out if we can fix that). It's vile, and probably should be illegal to not pass through the cost visibly.
- ezfe 7mo ago
  Stripe is 2.9%+30¢ right, and that’s the advertised rate. So I assume any business seeing averages higher than that can be avoided by using a platform like Stripe.
  - Spooky23 7mo ago
    Small merchants are people, and people vary in their intelligence/savvyness and may have other issues like poor credit or high chargebacks that they usually forget to mention. Some people roll the cost of the terminal into a higher fee as well. I helped out a friend who owns a deli when he took over from his parents. His dad saw cash as a way to avoid taxation and had some awful payment processor where they paid a high fee and was renting a POTS based terminal - $60/mo to Verizon and $30/mo for the terminal. Now he keeps one set of books, and raised his average sale by about 10%. Their catering business, which drives profits, are up significantly with online ordering through the POS. Ditto with a non-profit I was on the board of. Pushing Venmo and Square for donations increased donations by like 30% and reduced shrink at fundraisers. Anyone who claims they can’t afford a 3% fee is going out of business anyway.
  - havaloc 7mo ago
    The Stripe rate is a careful blend. There are many cards that are cheaper to process and there's probably a few that are more expensive to process at that rate, it works out in the wash in favor of Stripe. Also, that 30 cents is a large percentage if you're looking at a $5 transaction, for example (6%!) See the "raw" rates here: https://www.mastercard.com/content/dam/mccom/us/business/documents/merchant-rates-2025-2026.pdf https://www.mastercard.com/content/dam/mccom/us/business/doc...
- fragmede 7mo ago
  Why not just pay Stripe/Adyen/Braintree to smear the fees to 2.9% + $0.30?
- Groxx 7mo ago
  To respond in bulk: > complaint: credit card fees are high and maliciously opaque. > suggestion: have you considered adding another company in the middle? ... do y'all understand that those middle companies profit from being in the middle? that profit comes from somewhere, where oh where could it be... why on earth would you expect them to improve your income? you are literally buying convenience from them. or is this just thinly disguised advertising?
MengerSponge 7mo ago
There are a few cards that offer 2% cash back with no annual fee. No chance their fee is 1.5-2%
- wccrawford 7mo ago
  Cards don't make money from their fees. They make money from people who fail to pay and then pay the ridiculous interest.
  - apparent 7mo ago
    Do people who pay ridiculous interest qualify for 2% cards? Honest question; I don't carry a balance so have no idea what is advertised at other types of consumers.
    - SoftTalker 7mo ago
      Why not? I'd gladly pay you 2% of $1,000 if you pay me 21%
      - apparent 7mo ago
        I was just under the impression that the cards with the best benefits were somewhat harder to get. I do understand that credit card companies make money on interest and late fees, so they should find consumers to be attractive so long as they ultimately pay the bill/interest. I guess the question is whether they can distinguish between people who are going to carry a balance but ultimately pay and people who are a true default/bankruptcy risk.
    - fn-mote 7mo ago
      What matters is their credit rating, not how much they carry as a balance. (However, that can affect their credit rating.)
  - bumby 7mo ago
    Interchange fees seem to be a sizable portion of revenue. Discover has listed them as 29% of revenue, BoA at ~$10B annually…

konschubert 7mo ago

In the EU, we now have instant, free SEPA bank transfers. I know that the banks are trying to build a payment solution on top of this technology but it's not really getting traction. I am wondering if there is a way to bootstrap something bottom-up by offering something to merchants that has a clear value prop.

HoldOnAMinute 7mo ago
There is always opportunity in FinTech. How did Venmo and Cash app get any traction? After all, we already had PayPal. There was already a way to transfer money to your friends. How did Robinhood get any traction? We already had Etrade and other online brokers.
- yobbo 7mo ago
  Usually by giving away free money to reach critical mass.
mrweasel 7mo ago
Probably not worth it, given that the EU caps the credit card fees at 0.3%, 0.2% for debit cards.
- llsf 7mo ago
  Well the cap is only on the interchange fee, there are several other fees to add to it... example: https://www.adyen.com/pricing https://www.adyen.com/pricing Processing a Mastercard card is "$0.13 + "Interchange+" + 0.60%" where the "Interchange+" would be 0.30% for EU. So more like €0.10 + 0.90% so for €10.00 product, it would be €1 of fee (1.00%). Much less than here in US, but still not negligible for small businesses that run on thin margins (and 20% VAT).
  - fn-mote 7mo ago
    Looks like you missed a decimal. 0.9% of 10.00 is 0.09 so the fee is 0.19 euro on a 10 euro purchase.

ralferoo 7mo ago

Wechat pay in China is interesting. It costs nothing to add money to your balance from your bank, or to pay someone from your balance. It only costs the end merchant who wants to withdraw it from their balance back into their bank. If they can keep it in Wechat pay and spend it on other things (which is very easy as it and Alipay are the primary payment methods for everything), then there's no charge. I guess Tencent are making their profit from the interest they earn on the money that was transferred into them that just stays in people's Wechat wallets in effectively a parallel currency.

mihaelm 7mo ago
And no doubt they’ll find a way to spend it in the app considering you can manage almost all aspects of your life within it. Revolut works similarly. You don’t pay any fees on transfers to other Revolut accounts, but you do for other bank accounts.
- johneth 7mo ago
  > Revolut works similarly. You don’t pay any fees on transfers to other Revolut accounts, but you do for other bank accounts. Does it? I'd be surprised if it does in the UK at least, as all banks do free transfers to every other bank in the UK via Faster Payments. I thought it was the same in the EU?
  - ralferoo 7mo ago
    Agreed. In the UK, I've never been charged a fee to send money within the UK on Revolut.
mitthrowaway2 7mo ago
Well, that definitely creates a powerful pull from customers to make vendors accept Wechatpay for transactions.

touwer 7mo ago

It's time for Europe to process the own money. Strange that the dominance of Visa/Mastercard/Maestro was left for so long. Of course there is a lobby from them to attack the digital Euro

deleted 7mo ago

[deleted]

Finnucane 7mo ago

One factor that the author glosses over a bit is that highest swipe fees are for credit cards with benefits. The interbank system he describes is a debit system, no credit is being extended. Even in the US, debit swipe fees tend to be less.

saharshpruthi 7mo ago

In India there is UPI (Unified Payment Interface), which works with all bank accounts, it's facilitated by the Government and it comes with i. QR Code (Used with strangers and at Merchants) ii. UPI ID iii.And links to phone number. Anyone can pay to anyone instantly free of Charge. Only limit is it's limited to ~ $1000 payment. The QR code can also be dynamically created by POS terminals containing the total bill amount as well, so upon scanning the amount is auto populated in the payment app, you just have to enter the security pin. And since it's a Govt. Project, its not limited to just one app, there are lots and lots of apps working on the same system. There is even a VISA/Mastercard credit alternative : RuPay that works within the system.

0x5FC3 7mo ago
Its limited to about $1000 a day. The QR is a URI with the ID, amount and maybe other stuff. It's a client-side implementation. RuPay sure "works within the system" but is pretty much useless for international payments/subscriptions. Not really a VISA/MasterCard replacement.
- bigfishrunning 7mo ago
  So people scan a QR code, and then enter a secure banking pin? this sounds like a security problem waiting to happen...
  - wiradikusuma 7mo ago
    The QR code doesn't open a link. It's just "gibberish" text only usable by app that can understand it (e.g. banking apps). (I don't know anything about UPI, but in Indonesia we use a similar system)
    - Imustaskforhelp 7mo ago
      I am Indian and I think what you are saying is correct. It opens up the banking app or in our case UPI providers app so like Google pay, Phonepe,paytm, Bhim UPI and other such apps.

montenegrohugo 7mo ago

Shameless self-promo: We've been working for the last two years on making money movement free. We use ethereum (and stablecoins) for that, and integrate with the novel real time payment networks like PIX, Wechat, Yape, Mercadopago and so on. We're still orders of magnitude smaller than Visa and Mastercard, but I do believe products like ours (and competition is red hot here, theres so much good choice!) will be good for consumers. Money should be like a message: free and instant We're open source btw, happy to show off codebase and review PRs https://github.com/peanutprotocol/peanut-ui https://github.com/peanutprotocol/peanut-ui https://peanut.me/ https://peanut.me/

Imustaskforhelp 7mo ago
What I want is being able to pay stablecoin from my side and be able to esentially get a virtual card of payment. The only way which has worked for me was actually using g2a with their crypto provider to get a 10$ gift card of rewarble and activate it. Does your app allow something like this? can I convert any crypto to payment provider which can be accepted from the other side or am I reading it wrong because you do mention PIX, if it can work with PIX, does it work with VISA/Mastercard cards too?
- konradurban 7mo ago
  not exactly. peanut has banking relationships for fiat withdrawals and deposits, where the usdc gets sold for usd or reales or pesos or whatever seamlessly. anyway, what this means is that you can send funds to anyone in the world in milliseconds, for free. they can then move the funds to their bank easily

flaxxer 7mo ago

[dead]

intrasight 7mo ago

Why not FedNow?

builder36 7mo ago
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llsf 7mo ago
You mean the thing that launched in 2023 and that is still not widely deployed ? My BoA still prints checks and mail them to the US Bank across the street when I have to pay my HOA. So yes, why not FedNow... BoA and USBank ?
tryptophan 7mo ago
Its been interesting how much of a nothingburger fednow ended up being. Lack of adoption probably because it seems to function just as a faster ACH, without any of the UX improvements systems like Pix, UPI, blik, etc have...

kwanbix 7mo ago

In Argentina we can transfer using our account number (or account Alias, for example my alias could be kwanbix) directly, account to account, instantly, it costs 0.

llsf 7mo ago
In US also... but here in US, my bank (Bank of America) would print a check, put it in an envelop, send it to the other bank (e.g. US Bank). So, it is not instantaneous, but it is still free. The drawback is when the US Bank office down the street that hosts the account closed for water damage, it stopped receiving the checks, and it took forever to bounce, so I had no idea that I was not paying my HOA... And this happened in San Francisco, California where the Bank of America and the US Bank are on the same street, a block away... I cannot wait for FedNow or anything trying to fix this mess.

wagwang 7mo ago

Let's just call it for what it is. Visa and mastercard innovated in an era where payment settlement was notoriously difficult and expensive but they've used their monopolies to entrench themselves in (by negotiating deals with merchants and bribing consumers with points) while the rest of the world moves on towards "layer 2" payment systems that are much cheaper and efficient.

jen20 7mo ago
The real thing consumers get is fraud protection, and the ability to charge back when merchants become intransigent. Let's not pretend other systems (even the ones prominent in the US like Zelle) offer the same protections.
- wagwang 7mo ago
  That's cc propaganda; merchant fraud is a tiny portion of the overall transactions so you'd save more overall if the cc fee wasnt passed onto the consumer. The counter argument is that the aggregate data allows payment processors to ban merchants if they are bad actors. But the counter to the counter is that the level 2 payments work very well in other countries (some with a lot more fraud) and data aggregation/centralized ban power is bad.
  - jen20 7mo ago
    I have personally charged back a transaction (not fraud per se, but certainly not a service delivered) in the last month. It's not just about merchant fraud, it's about holding businesses to account in a world where individual consumers are increasingly powerless.
- ShowalkKama 7mo ago
  >The real thing consumers get is fraud protection I don't need fraud protection and the ability to charge back when lunch at a restaurant, I just need a skimmer-resistant payment method (which a phone is).
  - 7mo ago

havaloc 7mo ago

If a restaurant runs on a 9% net margin and pays around 3% in card fees, then roughly one-third of its net profit is going toward payment processing.

matsemann 7mo ago
It's weird how this works. Saw something similar when working for a bus company. After reaching a minimum amount of sales for a bus route, everything after that is basically pure profit. However, how do we get those last sales? Well, by bidding higher on people searching for transfer between those two cities. Let's say the ticket was $20. We could end up for instance accepting to bid $10 for an ad that would lead to a sale. So for every $10 of pure profit we then got, Google also got $10. In a sense it was a good deal for both parties, but it's also kinda insane that in the end, Google made as much profit on our busses as we did.
carlosjobim 7mo ago
If they're running on 9% net margin, then card fees are pretty down on the list of problems. They're vulnerable to any kind of fluctuation.
- Marsymars 7mo ago
  Yes, restaurants in general are vulnerable to any kind of fluctuation.
  - carlosjobim 7mo ago
    They are. But it's misdirected to blame card fees, when they're so tiny. If anything, they are benefitted by accepting cards, since they get customers who purchase on credit. Or just in general because many people have less resistance towards making a card purchase compared to a cash purchase.

crazygringo 7mo ago

This article is missing some important aspects/context: > If the card processing cost is 4 percent of the sale price, the fee amounts to $6. That $6 is not 4 percent of the profit; it is 12 percent of the merchant’s margin. Sure, but merchants are raising prices overall together with all their competitors, or charging more when using a card. Credit cards aren't taking away 12% of merchants' profits that they'd keep otherwise. Also, credit card fees are not 4%, they're 1.5-3.5% with an average of around 2.3%. > The merchant may pay little or nothing per transaction, the funds usually arrive immediately and no physical terminal is required. But what's missing here is fraud protection. It's more like debit cards than credit cards, and debit card transactions are much cheaper in the US too (more like 0.7%). Now that it's increasingly common for local merchants to implement a credit card surcharge (so non-CC users don't have to pay more), and a large percentage of credit card fees come straight back to the user as rewards (e.g. a 2% cash reward), it's not really clear that payment fees matter all that much in the end. See: Fed Data Shows Economics of Interchange: 86% of Fees Fund Rewards Programs: https://www.pymnts.com/news/loyalty-and-rewards-news/2025/fed-data-shows-economics-of-interchange-86-percent-of-fees-fund-rewards-programs/?utm_source=chatgpt.com https://www.pymnts.com/news/loyalty-and-rewards-news/2025/fe...

Reason077 7mo ago
> “Also, credit card fees are not 4%, they're 1.5-3.5% with an average of around 2.3%.” And they’re much lower than that in the UK and EU. Even the smallest UK retailers can pay as low as 1.6% or 0.8% + £0.02. The big guys who are running billions of £ are paying 0.5% or less. (These apply to in-person transactions, accepting cards on the internet typically costs more).
AnthonyMouse 7mo ago
> Sure, but merchants are raising prices overall together with all their competitors, or charging more when using a card. Credit cards aren't taking away 12% of merchants' profits that they'd keep otherwise. That depends on the market. Suppose you're selling something which has a substitute available for the same price, so the customer will buy whichever one costs less by any amount, but the substitute is in a different market where the payment is in the form of a bank transfer or it's a tax deduction etc., or the substitute is paid for in time rather than money. Then none of the sellers accepting credit cards can raise the price because otherwise the buyer would go to the substitute. And all markets are like that to some extent. For some the seller can't raise the price by a cent without losing 100% of their sales. For others, raising the price would "only" cost them 5% of their sales... but that's still 5% of their sales gone, and all the same fixed costs to cover. And, of course, in the cases where the price goes up, now it's the customer eating the fees, which is fairly nefarious when it's being subtly hidden from them. > Also, credit card fees are not 4%, they're 1.5-3.5% with an average of around 2.3%. Stripe is 2.9% + $0.30. For a $10 transaction, that's 5.9%. For a $3 transaction it's 12.9% -- of revenue, not profit. > But what's missing here is fraud protection. "Fraud protection" is is independent of the fees. You're making the case for that yourself -- if 86% of the fees go to rewards programs then they could be reduced by 86% without affecting "fraud protection", and the rewards programs are a wretched thicket of dark patterns and unpaid interest scams taking advantage of people who are bad at math or too short on time to configure them efficiently, on top of a tax on lower income people who don't qualify for them. It's also not clear why "fraud protection" should cost anything. The bank has no meaningful way to investigate a low dollar amount he-said she-said and the high dollar amount ones should be going to the actual court system, so why should they have anything more than a set of rules (e.g. which transactions are eligible, how long you have to file a dispute) under which you can make a request to have them flip the bits back in their computer for free?

flerchin 7mo ago

Payment processing networks are not free to build or operate. There are necessarily fraud controls and transaction reversals that require human oversight. This all costs. Nations can and should build this infrastructure, but in the absence, a payment processor is going to charge interchange. Otherwise why would they bother.

Retric 7mo ago
Uninvolved companies wouldn’t bother, but outlaw such fees and lenders would still build this kind of infrastructure so they could make money charging people interest.

pjdkoch 7mo ago

/me looks around in stablecoins This is a pretty solved problem.

MoonWalk 7mo ago

"...backed by formidable fraud protections" Laughable, at least in the USA. It took decades for us to finally get cards with chips in them, and when we finally did... the issuers "forgot" to implement the other half of the equation: PINs. "Chip-&-PIN" was standard through the rest of the industrialized world for ages, while card companies abetted theft in the USA by neglecting to implement PINs.

arkmm 7mo ago

Payment fees are crazy when you think about them from the perspective of a merchant in a low margin business. E.g. in retail or restaurants, margins aren't much better than ~10%. If they didn't have to pay ~3% credit card fees, they'd have 30% more profit!

samrus 7mo ago

Pakistan has this government facilitated payments infrastructure called Raast. Its not private, so it work directly from bank account to bank account. It works great, and avoids vendor lockin. This plus the mobile wallet boom (basically mini bank accounts with far less barrier to entry) means you can now pay quite a few (unfortunately not most yet) normal street vendors with this. I think thats a great system