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They tax our entire economy at X rate, while maintaining their infrastructure only requires Y cost ... and X is significantly higher than Y. From the actual ar
by hungryhobbit 22d ago
They tax our entire economy at X rate, while maintaining their infrastructure only requires Y cost ... and X is significantly higher than Y.
From the actual article:
> The payment processor keeps 0.35% ($0.35), then pays 2% ($2.00) to the cardholder’s issuing bank and 0.15% ($0.15) to Visa. The 2% is the interchange fee, commonly known as interchange. The 0.15% is the network assessment fee. 8
In other words, they get 0.35% of every transaction ... and it does not require anything close to that to maintain their network.
- superxpro12 22d agomiddlemanning is the most american of business ventures
- einpoklum 22d agoI thought that title belonged to bombing campaigns and coups by shady guerilla groups.
- deleted 22d ago[deleted]
- gloryjulio 22d ago> and it does not require anything close to that to maintain their network. If it's so easy to disrupt visa/mastercard payment network, they wouldn't be able to charge this much. Payment is a highly competitive business. We witnessed so many payment companies went under or were bought out, but these two stay for years and are still profitable. The truth is their moat is considered very durable and hard to build. A global n banks to n banks payment network is not as simple as how people thought.
- cassiogo 22d ago> If it's so easy to disrupt visa/mastercard payment network, they wouldn't be able to charge this much If they have the US government behind them its much easier https://thepaypers.com/payments/expert-views/pix-hits-a-wall-trump-administrations-opposition-to-its-us-expansion https://thepaypers.com/payments/expert-views/pix-hits-a-wall...
- Aspos 22d agoIf someone owned all the highways, building an alternative would be difficult as well.
- carlosjobim 22d agoVisa and Mastercard do not own the internet cables or the wavelengths. Anybody is free to compete, and that's why they have many competitors. It is very common for businesses to accept a variety of unrelated payment methods. There is no monopoly here.
- warkdarrior 22d agoWhy hasn't Alipay completely replaced Visa and Mastercard in US? Everyone has a smartphone to scan a QR code.
- Aspos 22d agoI struggle to understand how is this relevant. Alipay is closer to paypal than to VISA/MC
- notpushkin 21d agoAlipay the wallet app is closer to PayPal. But they also have Alipay+ which connects a lot of different wallets and banks: https://www.alipayplus.com/mobile-payment-provider-list/ https://www.alipayplus.com/mobile-payment-provider-list/
- 8note 21d agohave you not seen what happened to tiktok?
- coredog64 22d agoSame as it ever was: https://news.ycombinator.com/item?id=9224 https://news.ycombinator.com/item?id=9224
- UltraSane 22d agoCredit card companies are mostly parasitic middle men but I have a credit card that I use for most payments and pay off the balance every month and effectively get 2% cashback with no interest costs.
- losteric 22d agoThe actual rates charged to merchants are variable, and typically higher for rewards/cashback cards. Basically, other people are subsidizing cards with higher benefits/cash back (of course as people shift, the merchant raises prices to compensate for the higher average fee, or just charge an additional Z% higher than your cash back)
- warkdarrior 22d ago> other people are subsidizing cards with higher benefits/cash back Ripping off other people is the American way.
- tialaramex 22d agoThat 0.35% feels more reasonable in 1976 or even maybe 2001 than it does today because technology changed so much. But maybe I'm wrong about that If you're an American that 2% is a much bigger problem for your society. That's a direct funnel from the poor to the wealthy, it's not as a obvious a problem as "Trump gave the ultra-rich a tax cut" but it might structurally be more significant.
- tonymet 22d agoGoods (and services) are priced at what the customer is willing to pay. In this case, the alternative is cash or cheques, both have much higher loss rates. That’s why vendors are eager to take visa over cash.
- hgomersall 22d agoNo, the alternatives are any number of other solutions that are not given a look-in to the very lucrative duopoly. The network effects are prohibitive for upstarts.
- tonymet 22d agoCan you give an example ?
- deleted 21d ago[deleted]