I would not be surprised if rather than continuing to battling it out with the credit card companies to negotiate for lower fees, more and more retailers adapt to the cashless economy by leaning on ACH in lieu of credit cards, especially in market segments where repeat business is common (basically any retailer that has an existing loyalty program).
To put it another way: Sure, litigation is an option, but even if you win the concessions you want, it will leave the credit card companies entrenched. Pushing more customers to pay via non-credit-card methods has the benefit of more immediate financial impact, less reliance on the legal system, and deterioration of the power that led to the anticompetitive behavior in the first place.
For example the "Earnify" app for all BP, all Amoco, and many ampm stations (it should eventually be all ampm but the rollout is still underway) will let you enter payment information, but you can also tell it to just use Apple Pay. (They don't have an equivalent option on Android).
The Earnify savings are $0.05/gal. You can link an Amazon Prime account and that adds another $0.05/gal and on Fridays another $0.10/gal on top of that for a total of $0.20/gal off. (It also has sometimes given $0.50-$1.00/gal off during Prime Days).
Since (1) ampm is usually the least expensive Top Tier certified gas in an area or the second least expensive (after Costco) and (2) any extra additives and cleaners beyond those required for Top Tier certification do not have enough benefits over the life of the car to justify paying more (according to independent tests) I'm baffled that so many people who complain vociferously about the price of gas are not going to ampm (or Costco) even when there is one near where they do get gas and it is often $0.50+/gal cheaper even without any app discounts.
And for other retailers, I would totally not use ACH just for the protections that a credit card provides.
Would he like it if the cashier took his wallet for money as opposed to him giving the money?!
I had to on the spot download a mobile app to pay to get my car back from valet parking at a really nice hotel the other day. They only accepted payment via the app which they did not disclose before taking the car. I had to stand there for 10 minutes installing the app and setting it up and I will likely never go back to that hotel (becuase of location, not the app).
No idea what would have happened if I just had an old fashioned flip phone
Connecting my checking account to that? Fuuuuck that.
(I just use cash most places. Works great.)
Typically on the web you need to select your bank, get redirected to your bank's website with a pre-filled transfer you validate, approve 2FA on your phone app, and then the purchase gets confirmed only 1 or 2 business days later when the transfer gets received.
I see small businesses just give you their IBAN too, and you need to manually add it and make a transfer. Not seamless at all.
Asia has it better with more payment networks, union pay and QR code based networks.
However the EU is getting the "digital euro" in a few years as an alternative to VISA/Mastercard which is supposed to have similar dispute resolution mechanisms.
Or do you mean debit cards?
But you don't know who owns or operates a gas station. They've all got big brand names, but what's their business model? Who's actually running the transaction? The gas pumps are practically unattended and, highly regulated by Weights and Measures because of the high potential for vendor fraud already. Gas stations are already notorious locales for card-skimmer danger. So, I would be loath to get into an ACH bank dispute with Sri Singh McSikhface.
I already had massive troubles, some of them Visa-related, with local laundries and dry cleaners. They are vicious, fly-by-night, and dishonest. I would not risk the same shitty experiences with gas stations.
I’m also wondering if you and I have encountered rather different permutations of these “pay-via-loyalty-app” schemes. In the part of the world where I’ve been spending time, the gas purveyors who I notice pushing the apps are the big, brand-name fuel station networks. The same ones who’ve pushed own-brand payment services to fleet managers for a while.
If you’re worried about card skimmers, wouldn’t you prefer to use the method that routes payment directly through Corporate Fuel Parent, rather than trusting the franchisee with any of your financial information?
That's just the way people have paid for gas since they had bank accounts.
You could just pay cash and get the same price? They’re just offering the cash price if you use the app and set up ach payments?
1. Merchants need to be allowed to add card processing fees on top of any transaction, and it should be possible to do this very easily. If not this, then any receipt should be required to include card processing fees.
2. Merchants should be allowed to pick and choose which cards they accept without penalty.
Those two simple changes would add competitive pressure back into the payment processing market, and quickly cause fees to lower.
I had no idea how Costco or Home Depot or Walt Disney worked ...
Yet the acquirers seem to be always absent from these lawsuits.
Network gets swipe fees, and a percentage of the interchange Issuers get majority of interchange, and carrying interest and fees Acquirer gets the markup plus whatever admin/maintenance fees
Here's what I found for a reference: https://cmspi.com/back-to-basics-card-network-models-and-glo... which tracks with my experience.
I'm open to be corrected though.
That 30 cents - is what's often ignored but makes up a disproportionate amount of the fee.
On a $30 transaction, paying 30 cents is equivalent to a 1% fee.
So Stripe on a $30 transaction is effectively 3.9% in fees (on a $30 transaction).
Interchange (which goes to the issuer), would only be approx 1.75% (of the 3.9% fee charged by Stripe).
I know in practice the merchant is left holding the bag with charge back fraud, but it is a devil's advocate point.
For good or bad, a lot of studies have confirmed that cards have overwhelmingly increased consumer spending.
I think the far stronger case is that the industry has no actual incentive to fix the underlying fraud that they are charging merchants to fight. They have done a lot of work to institutionalize the problematic infrastructure and make it almost impossible for startups or outsiders to fix.
It’s the anticompetitive actions causing the deadweight loss, not the digital nature of transactions.
There is a lot of psychological awareness created when you have to pull a couple singles vs. a Benjamin out of your wallet vs tap card for all amounts.
So the hope is that new or one of the other brokers step up and hopefully their ethics are better.
Amex does this as well and it’s a mixture of internal opinions of executives, board, major shareholders, as well as the US federal government just telling them (see operation chokepoint for just one variation), as well as chargeback and fraud rates in some industries just validating personally held opinions
If you break up the Visa and Mastercard cartels, does this San Diego pizzeria then have to decide what cards to accept on a bank-by-bank basis?
The negative impact from these fees is probably greater than the lift from AI productivity gains (not investment).
[0] - https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
I guess the point being there is probably a better reason for the high fees than the company trying to be anticompetitive, Or perhaps better said as a better reason for being anti competitive than high fees. Monopolistic lock in? Regulatory Capture? The problem is, that this blames the government instead of the company.
At that point it is put onto me to prove that the use of the card was authorized (Which is usually practically impossible given the limited info I have about the person and their transaction).
Then at least half of the time I lose and forfeit the full transaction amount in addition to the fees Stripe charged me, having already shipped out a product.
It all gets folded into the cost of doing business, but it infuriates me that I end up on the hook for "unathorized" use of a customer's card. (Scare quotes because usually I suspect it was authorized and they just forgot or got mad about their order)
So it also makes me mad when I hear people say the middlemen earn their cut but handling fraud and security, since they are just passing that cost onto merchants anyway.
You may have missed it, but Australia's banned card surcharges and tightened the interchange fee caps, but it's not really solved the problem. Someone's still paying.
Australia already has fantastic banking infrastructure. PayID lets you instantly transfer money between banks using a phone number or email, generally for free. We've also had eftpos for decades, a domestic debit card network that competes with Visa and Mastercard.
Surely we can make paying a merchant directly from your bank account as easy as tapping a card with proper fraud protection baked in?
I appreciate Visa and Mastercard provide genuine value, but like why should moving my own money attract a commission on the transaction? If I sell something for $10k, why should the payment network earn more than if I'd sold it for $10?
This is essential infrastructure. Governments and banks could fund it without taking a commission on every transaction. It doesn't have to be free to operate, just free at the point of use.
It's 2026, for fuck's sake. Surely there's a better way.
I've been using Same Day ACH in all my businesses for over a decade and the transaction fees are about $0.30/transaction and the dispute window is 60 days for PPD (personal checking accounts) and 3 days for CCD (commercial check accounts) and you get the money the same day. It beats paying visa/mastercard percentage fees and the 120 day dispute windows where people can literally get their money back four months later for work that was already performed. By using Same Day ACH, we get the money from the customer faster, save potentially millions of dollars in fees, and reduce dispute windows from four months to 3 days (for B2B sales)
https://oliverbatemandoesthework.substack.com/p/the-work-of-...
"We have a case pending right now in the Ninth Circuit. It was a privacy lawsuit against Google. A journalist, not a trial lawyer, determined that you could turn off tracking in Google Maps and it was not supposed to share your data, and then learned that Google was sharing it anyway, whether you turned it off on your phone or turned it off in the app. State attorneys general came in, fined Google a bunch of money, and forced Google to stop. And simultaneously there is a follow-on class action built on the journalists’ research, and that has settled.
The settlement is that Google creates a fund of sixty-two million dollars. The lawyers get nineteen million and the class gets zero. The rest is a big slush fund for a set of left-wing groups. Nothing requires the recipients to be left-wing other than that being what the attorneys chose to present to the court. They do it partly because some of these organizations are clients of the law firm, some of them have lead partners of the firm sitting on their boards, some of them are the attorneys’ alma maters, and some of them are just left-leaning outfits that are promising to do left-wing things. The class is two hundred million people. Maybe a hundred fifty million of them would not like what is being done in their name with their money.
And the judge decides who gets paid. This judge was very excited about getting to stop being a judge and start being a grant administrator with a big pot of philanthropy. We said, why are these unrelated organizations, which are not even unrelated, they are affiliated with class counsel, getting the class’s money? If the plaintiffs’ lawyers want to support the ACLU, it should come out of their pockets and not the class’s pockets. It is perfectly feasible to distribute that money to the class. Much smaller settlements get distributed to similar class sizes all the time. You can complain that if you divided it evenly among every single class member it would be a tiny amount and not worth paying out, but you do not have to do it that way, and most class actions are not done that way. Most class actions settle for less than a dollar per class member. You create a claims process, let class members sign up if they want the money, and divide it that way."
The cost of the product should be what's on the label. If that's not enough, raise the price.
> Why not add on an additional fee for every other thing like, fuel surcharge on delivery costs, employee surcharges (I don't live in a place where tipping is expected), or even energy surcharges?
A lot of companies already do this. As long as those fees are mentioned somewhere before purchasing, it's legal here:
https://abc7news.com/post/what-are-surcharges-bill-when-eat-...
California banned all these surprise fees, and then the restaurant industry got their own exemption:
https://calmatters.org/commentary/2024/06/california-restaur...
It's common for the price you pay to change when the method of purchase changes. For example, having a product delivered costs the seller more than if you picked it up from the store, so you have to pay a delivery fee.
If you pay via a medium that does not return some of the margin to you in the form of rewards or a 'cash/debit' rebate, then functionally you're paying an invisible tax.
This means everyone should be using credit, ideally the highest reward options, which themselves have the highest processing fees, which result in higher prices all around. The creation of higher tiers of rewards and super-premium cards just repeats this cycle, whereby normal cardholders and cash/debit users are now subsidizing high-spend premium card users.
Further, large retailers negotiate significantly preferential rates and lower processing fees for their book of business. This means small and medium sized businesses pay significantly more per transaction for processing, meaning they're less competitive and less pricing pressure is placed on large retailers, which again raises prices for you.
There's also the card issuer side of things, but in short if you're not changing your credit cards regularly, companies will depreciate rewards and benefits over time in previous lines to move you into a higher margin segment of their portfolio.
In short, there's already a divergence, and you're already paying for it in multiple ways.
Or put another way: the list price must be reasonably achievable, but charging more for "extras" (eg. a more expensive card with benefits) is always permitted.
The best answer is probably a combination of the two: break out the bullshit costs the customer has to pay so that the consumer can see them, but still give them the upfront cost as early in the transaction as possible.
Unfortunately it has become a popular idea to ban the surcharging of these costs by retailers, so it's likely to be outlawed by next year, which is completely asinine. Now we'll be back to a situation where customers who use a cheap payment method will be subsidizing customers who use an expensive payment method.
And guess who wins there...
Just curious, how is this not painfully obvious and so there's opposition to it? Nobody is expecting this to lower prices, right...
Why the same logic does not apply to cash payments? They have costs too.
> Unfortunately it has become a popular idea to ban the surcharging of these costs by retailers, so it's likely to be outlawed by next year, which is completely asinine.
It's completely sane. Surcharges are now outlawed in Australia (from 1 Oct) and I finally paid for my coffee exactly the same amount that was written in the blackboard. Businesses that do not want to absorb the 0.5% fees are free to stop accepting credit cards or can raise prices (none near me did that so far). That's fine, the most important thing is if coffee is 5.50, you pay 5.50, not some random amount.
Last week, I visited two unrelated non-profit museums, and when there is free admission I strive to make a freewill donation to show my appreciation and lend support to the mission. I offered the same amount to each location, and the second one, according to my bank statement, has involuntarily charged me for the fees as well. No wonder they greatly prefer tossing cash into the Plexiglas box.
“Pick and choose which cards they accept without penalty” won’t do anything in a market where 3-4 card processors and 3-5 banks have a near-monopoly on transactions.
If I sell ice cream and decide I won’t accept Chase credit cards because the fees are too high I’ve just lost 1/4 of my customers or something crazy high like that.
Let’s quit trying to find weird workarounds to keep capitalist failures propped up and use regulatory teeth.
Cap transaction fees at something reasonable like 0.5% and the problem disappears overnight.
Yes, you’ll lose your rewards, and that’s a good thing. Rewards cards are a massive wealth transfer mechanism that shouldn’t be legal.
They can* and they do.
*It is capped to the actual processing fee, the card network must be notified, and the fee must be disclosed upfront to the consumer. A couple of states like CT and MA disallow consumer fees.
On most planned larger purchases (like more than $1000), I've seen CC fees recently.
> Merchants should be allowed to pick and choose which cards they accept without penalty.
To be clear for readers, merchants can choose their accepted card networks -- Visa, Mastercard, Amex (or alternatives like PayPal).
Networks requires merchants to accept all of the card within that network (hence the name "network"). Visa has three tiers; Mastercard has four. Something like ~90% of CCs fall in the traditional rewards tier, so there's less card variation than you might think. Though higher tiers tend to spend disproportionately more.
Stripe and the flat x% + $y are of course popular because of the simplicity and predictability of it.
1. I would like payment processors to have the resources and capacity to adapt to threats and maintain highly resilient infrastructure. This is expensive and requires a lot of ongoing investment.
2. If payment processing was turned into a public service, the complexity of international integration and necessary relationships, standards, etc. would become a public service burden. I'm not sure that I trust my provincial or federal government to handle this adeptly.
3. There is a lot to this that we're probably unaware of.
I'm not trying to protect banks in the slightest, but it's a baby and bathwater situation. I'm not confident in my country's ability to create its own payment processing platform that I would trust to be a reliable, sustainable, value-generating system operated by public servants. I don't mean value-generating in the profiteering sense, but in the "this is worth operating on public funds because, ultimately, it is more than worth what tax payers put into it".
I think some things are an awesome fit for public services, but a lot of places are probably not equipped to take this kind of task on safely and competently. My country is more likely capable of regulating these institutions, not replacing them internally.
We tried to make a COVID-tracking app and spent $59.5 million, and it was an abject failure. How much would we spend on a broken payment processing platform?
You live in Canada, which already has better options than the U.S., though the sittuation is getting better in the U.S.
For example, Interac is free for most people and very easy to use.
Debit payments often cost merchants less than 10 cents per tap. The local gelato place only takes debit or cash; if you don't have either, they're happy to accept an Interac payment, and do so more often than you'd think.
Part of the problem is that the incentives are misaligned. People want their points systems. Merchants want customers, but they also want lower transaction fees. Most customers have debit cards that would be much cheaper for merchants, but choose to use their credit cards, because they want the "rewards."
While the 3% or so that a bank charges might seem low, if you look at this from a low-margin business, that 3% may actually be much higher percentage of their net profit.
Regulation concerning rewards systems could go a long way towards shifting the system to be much less costly for businesses.
There's not much hope of real change here; Canadian banks are very profitable, and are a cornerstone of our economy. It's very unlikely that politicians will do anything to risk that.
[1] https://www.indiatoday.in/business/story/npci-rs-500-crore-p...
The underlying issue is not if we can build the network (we can) but getting people to actually use it. For example, if we wanted to repeat the Japanese success of IC cards here, we'd run headfirst into the problem that our public transit networks aren't big enough to be a credible Visa/MC alternative:
- Most public transit systems large enough to issue their own fare cards and readers are also regional monopolies, because there's not enough transit demand to sustain multiple companies with different routes. If I'm in Pittsburgh, all the buses and trolleys are run by PRT. In the Wasatch Front, it's UTA. Those agencies have little interest in becoming banks; they operate the fare cards mainly to keep fare payment easy, and they don't need to coordinate with anyone because everyone already joined into a single large transit agency.
- Metro areas with multiple transit agencies often have political differences that make coordination difficult. For example, in Long Island, NY, Nassau County's NICE bus system had legacy Metrocard fare payment that wasn't upgraded to OMNY until a month or two before Metrocard was completely ripped out and shut down. A rare exception to this would be the San Francisco Bay Area where there is an insane amount of political fragmentation and somehow they all wound up taking Clipper.
- A lot of Americans just never touch trains or buses enough to actually need a transit card.
- A lot of transit agencies are just surrendering to Visa & Mastercard and taking credit cards now anyway, even though transit fares are exactly the kind of microtransaction that is ill-suited for those networks.
Ironically, the best bet for an American-run payment network would actually be to nationalize E-ZPass[0]. In fact, in 2008 Congress passed a bill specifically mandating a unified toll payment system, but nothing came of it because the bill had no actual teeth. The main problem with this idea is that E-ZPass transponders won't fit in your wallet; you'd have to launch a separate form factor for an "E-ZPass Card" and at that point you run into all the same problems I just mentioned with making a unified transit fare system.
[0] E-ZPass is an RFID transponder system for toll payment that is very well-adopted along the east coast.
They are draining/milking the cow. At some point, they had significant value in quick information transmission when the internet and smart phones weren't really a thing. But now the only advantage is chargebacks/refunds which coincidentally, the experience there is being made shittier.
Still, not worth the 3-5% premium. Glad many merchants are starting to charge for credit card use and push back.
Very sure the amount those companies make yearly is worth saving.
> We tried to make a COVID-tracking app and spent $59.5 million, and it was an abject failure.
and then we just…kept letting those people stay in charge of spending our money.
and there’s a story of very expensive incompetency like that every quarter at minimum.
On the contrary, the middlemen in credit card transactions are providing a service whose value add is so obvious that it's basically invisible, because it's become so normal: financial intermediation. The credit card company is basically covering your debts for you until you pay your monthly bill--and shielding you from having to give every merchant you purchase from your bank account information. On the other side of the transaction, the credit card company is guaranteeing payment to the merchant, who now doesn't have to care about trying to assess the financial reliability of every customer. It's become so normal that we don't realize what a huge value add it is, as compared with, for example, trying to convince the grocery store to accept your check, which forces you to hand them your bank account information, and forces them to decide whether they think you (and your bank) are reliable enough that your check isn't rubber.
Consumers shouldn't have to pay a fee to give someone money. Sellers shouldn't have to pay a fee to collect money. Security should be built into the system, not a luxury you're taxed for.
They should not be able to tithe all of society in perpetuity because they set up shop decades ago.
See also: the app store, telecoms, health insurance in the US
The customer can file a chargeback in which case they win almost every time even if they are scamming.
Perhaps the card network provides insurance against bank failures, but they also allow fraudulent chargebacks which I'm certain account for a much greater amount of money than bank failures.
Dan why can't I write any more comments?
I understand why this makes HN so upset. To the uninitiated nerd brain, these are just pieces of information flowing in and out of some computer system across networks. How expensive could it possibly be to actually send a packet to perform an online authorization with a bank's database? We all know the actual communication is ~free. What you are paying for is the maintenance of that connection, the security around it (e.g., PCI-DSS compliance), the ability to dispute that communication out-of-band, etc.
We could cut the cost of VISA's network in half or better if we could drop the compliance piece. I don't know how that would play out for the consumer segment though. How much economic activity would be curtailed if the average consumer had to start worrying about the security and stability of payment networks? Card skimming is a great example of this. Consumers will avoid certain retailers if they perceive an elevated risk of theft.
In the EU, their rake is capped by law, to an order of magnitude less than what they charge in the US. And it's still profitable. (Otherwise they would have pulled out of the market if they were losing money, obviously.)
The fraud prevention/etc you discuss benefits from economies of scale, but their fixed x% per transaction does not reflect those economies of scale. The free market has broken down here because of the difficulty for new market entrants.
Then why are there so many of them? I like travelling and almost every country I go to has its own thing going on, often more than one. I lost count long ago
The component parts have been up and running for years.
I doubt the amount credit card companies charge in fees has much to do with the actual costs of running their service and are being inflated just because they can. My guess is that reducing the VISA's costs by letting them ignore security considerations would only mean that consumers get regularly screwed over while VISA continued to raise their fees every year.
We could also cut the cost to merchants by notably more than half if we dropped credit card rewards.
1) The government now has a full purchase record of every purchase you make
2) There is not a competing infrastructure where you can distribute your transactions across multiple companies to avoid a full profile building up
3) The government now has an incentive to eliminate un-surveilled options like cash and checks.
4) The government is now required to consistently legislate every single "he said, she said" fraud situation. Since it requires publicly available and consistently followed guidelines, this means everyone knows exactly which sorts of fraud work well
5) The government can trivially ban payments to anyone they disapprove of (porn, bitcoin, Iranian refugee charities, anyone who has the wrong opinion on Israel, etc. etc.)
6) The government can also wield all of this as a cudgel to threaten bad actors - do what we want or else we propose you go the Non-Payment List, we reveal your porn receipts, etc..
7) I don't even want to know what this does to the complexity of trying to use a card when traveling internationally
Not much - Canada has debit/credit cards that use debit domestically and Visa or Mastercard internationally. They're the default type of debit card that many people get.
That's essentially what a CC company does though, every transaction they're briding the timing gap between the card holder paying the CC company and the CC company paying the business. That's the core value add and cost they're bearing that they charge for.
They have risks from both sides of the transaction; on the one hand scam merchants who might get chargebacks and on the other customers who never pay off their balances (thought I guess that risk is covered by their interest charges mostly).
I recently ordered some snacks from another country and after 3 months the vendor stopped responding while never having sent anything. When I asked for a chargeback, my claim was denied because I didn’t have proof they didn’t send anything! I literally had an email from them that said they are backed up and unable to send stuff.
Where do you live or shop that you are happy to take what is effectively a 3% pay cut for the privilege of having a slightly easier option to get your money back if someone charges you the wrong amount?
Does this idea apply outside of the credit card industry
The middleman business, intermediation, seems to have worked well for the so-called "tech" industry
Replacing low quality intermediaries with superior automated ones at massive scale with all the associated benefits.
This is the story of obsolescence and human history.
The coming end state of which has led to this transformation from the "big data" to AI paradigm.
Now so called "knowledge work" is itself being disintermediated. No need to worry about "bullshit" desk jobs anymore. They will be gone. It turns out a stochastic sentence guesser is superior to the average knowledge worker. This will only improve and become further operationalized, with accompanying safeguards and adversarial checks. At a certain point the value is already gained. The founders have taken their massive exits. Soon it's not so special anymore. In short, intelligence becomes a utility.
The end state of all of this is the same dichotomy our earliest ancestors had already forseen: apocalypse or utopia. In the same way that credit cards were once a cool idea, now they are trite and their continued privatization is merely a private tax on almost all transactions, and as such is rather undesirable. So turn it into a utility. Just like if we all survive the coming wars, the future will be one where compute based intelligence is a public good.
There is absolutely not reason that the government should have abdicated its core function and allowed a monopoly effectively have a license to print the dollar bills and rent them out for a cut from ever single economic transaction.
Imagine if the government had suggested that in addition to all the other criminal extortions called taxes, when you use dollar bills to purchase something, you have to pay a 3% dollar-bill-usage surcharge every time a bill changes hands.
But it was obfuscated that this constant drain and fraud was being perpetrated because the whole system became extremely financially lucrative to the very people whose responsibility it would have been to stop the crime; so it has continued since. The mob was in control of the police.
Yes let’s give the economy to the people that run the DMV.
Look at the tension between United States and Brazil on this issue with their nationalized payments system.
The fact is the most important relationship Visa and MasterCard have is the one you left unsaid - their relationship with the United States government.
edit: just seeing now you're complaining about things being offtopic multiple times in this submission, without ever adding anything yourself. perhaps you could be part of the change you wish to see?
You're missing the driver. It's not like Google cares or wants to change the name. They more or less have to given the public/private relationship and who is responsible for what. It's not Google's job to name bodies of water, it's not a credit card company's job to censor. And if you actually look, they aren't making that decision because they want to. They are often acting on behalf of the government.
Payment companies are even more enmeshed with the state. They often do these things to simply comply with what the government tells them to do or to get ahead of government telling them what to do. Like with some of the anti-pornography laws being drafted or passed in certain American states.
The private/public distinction really needs to come under more scrutiny here. The credit card duopoly is very much tied in with state power. This has only accelerated post 9/11 as the Treasury's mandate increasingly shifted to "national security".
Payment processors are censors because the government is. Just like Flock the government can't do certain things so it contracts with a third party. They then have an interest in protecting/promoting that party. Flock is a snoop because the police are snoops. If Flock does it and the government merely pays for it well it's not a violation of your rights. Your rights protect you against the government, not against Flock. It's the same legal backdoor. A payment processor doesn't care what you buy, why would they? They make money so long as you keep transacting. It's the government that cares.
This same dynamic happens all over the American economy because the private/public distinction can get increasingly amorphous. Your credit card is as much government spyware as your phone. But understand - the problem is not the companies, it's the majority of your fellow citizens who either don't care or actually do endorse censorship. Unless you have a solution for that trying to blame credit card companies for the problem unfortunately misses the mark. You might as well suggest Google have the authority to name bodies of water.
- Many banks are not OK with that
- Even if you find one who does, finding an Open Banking provider to be that middleman is a nightmare
Short of working with the financial conduct authority to be your own financial institution, it's makes getting paid a pain if you want to accept adult content (even if you have all the safeguards and comply with all UK law!). I can't see anything but it being indirect pressure to censor, and to push smaller players out of the market - such that it's easier to regulate the industry.
It kind of is.
If the US executive branch published an order renaming every street in America to "America Street", I suspect Google would not update Google Maps to reflect that unless the government compelled them to do so.
Google has made a choice about where they're placing the bar for voluntary action.
They don't have to but they can, but monopolies and oligopolies don't have to and don't play by the same rules and they tend to have a lot of political and soft power. Especially in Google's case, it's not a stick a floating in the river and going wherever the current takes it. Brin and Page are (allegedly) sentient human beings and they still control the majority of the company. Maybe they couldn't pull of exactly what Musk is doing but there is a huge amount of space in between that and doing nothing.
Naturally the “other side” feels the same and returns the favor, so we end up in this death spiral of ignorant people reacting emotionally to complex issues they lack the patience to work through as a society.
Tl:dr there is no shortcut to changing society, any such victories will be short term and costly.
Can you quote the specific part you're referring to?
I think this is a fair request given the 15,000+ word length of the thing. Do you mean a particular abuse of the list contents (e.g. putting someone on it for revenge) or do you mean the overall pressure-campaign to get companies to adopt the list to prove they aren't Badguy Sympathizers?
If "the power to tax is the power to destroy" justifies insulating religion from government financial leverage, then the power to financially deplatform should raise the same concern for speech.
Elaborate with specific examples of how the commentors in question are being "off-topic" and what you would consider topical for this thread, or please cease spamming actual off-topic meta-commentary quips.
I'll refer you to https://news.ycombinator.com/newsguidelines.html
Maybe we hear about it because, it's right in the US' backyard and the biggest country there is Brazil from which pix comes from. All these payment systems threaten visa and Mastercard but pix is the largest in the US' backyard because the country it comes from, Brazil, is the largest there.
And it's also government run, dun dun dun. The us hates anything that is government run. That's why they hate china and communists and socialism so much.
I could see Debit Cards being replaced by direct transfers.
The issue is what happens if who you pay too does not provide the srvice or just runs off with the money.
Under UK Law the customer can deal with the Credit Card issuer and get their money back with a direct payment it is npot always possible.
For debit cards I think the issue will refund if fraudelent but might take a battle. With direct payments the customer has a much harder job.
Broadly, the interlocking restraints set and maintained by the defendants have forced merchants that accept any Visa and Mastercard credit card to accept all such cards, regardless of cost, thereby eliminating any incentive for issuing banks to compete by lowering their fees, the suit says. The lawsuit claims the challenged restraints have also prevented merchants from being able to steer customers to lower-cost payment options—for instance, by surcharging based on a customer’s use of a particular card. These and other restraints have prevented competition among issuing banks and other credit card networks, allowing the financial giants to raise their fees every year “without consequence,” the case alleges.
Fundamentally, I agree with the lawsuit. Logistically, this seems like a bit of a nightmare. No longer will it be "CC purchases will have a 2% extra fee." Instead it will be "If you have a Chase Spark card, the fee will be 4%. If you have a Costco Visa card, it will be...".
If merchant fees are < 1% if I use debit and ~ 4% if I use a rewards card, but merchant rules (set by the networks and enforced by the acquiring banks) say they can't accept amex and surcharge rewards cards but not debit cards, they can't reduce their costs by pushing me towards debit cards or non-rewards cards.
There's some other things they're challenging that could allow for more competition.
Removing the 'No-Bypass Rules' could allow for lower cost clearing if the acquiring bank is the same as the issuing bank and the potential for lower cost clearing when the the acquiring and issuing banks have a clearing relationship outside of the major networks.
Removing the 'No-Competing-Marks Rules' could allow for a card to be Visa + some upstart lower cost network; if the merchant supports it, great, if not, they can still process payment through Visa. I think US law requires ATM cards to be usable through at least two distinct networks, and there's at least some diversity in ATM networks as a result.
The European Union caps consumer card interchange fees at 0.2% for debit cards and 0.3% for credit cards
https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
https://en.wikipedia.org/wiki/Durbin_amendment
This is explicitly about credit card fees.
A friend of mine owns a restaurant that is pretty remote so lower business. He told me he doesn't take credit cards because he would be paying them a percentage for everything.
It is kind of like the mafia to a small guy like him.
I think he does do a few phone apps.
A waitress at another cash-only restaurant told me, worse than customers who hear they won't take credit cards are the apple pay folks. "They really get annoyed when they don't get their apple pay"
Franchises don't care. They can raise prices monthly or even dynamic price if they want to.
Kind of sucks for society because lots of the best/greatest restaurants are not franchises.
Depending on which sources you believe, the cost of handling cash can actually exceed credit card merchant fees.
Many cashless businesses, including bars and restaurants, do it specifically because handling cash is expensive if you actually do a full accounting for it.
I get what she's say, but it is kind of a weird comparison, because Apple Pay is more-or-less payment network agnostic. You can pay via credit, debit, or transportation card (and possibly others that I haven't used) on Apple Pay.
In the US you even have Apple Cash which is pretty close to digital cash equivalent... not really workable for a business with the $2k/week limit though.
The reality is that for most businesses, accepting credit cards, with their fees, results in more revenue overall (more customers).
If your business is low volume, cash only makes more sense.
A lot? Not sure about that.
>I think he does do a few phone apps.
Not if he's cash only he's not.
and don't pretend like it's not possible, it's obviously possible: take the system and lower the fee to something proportional to the price of providing the service
if credit card rewards programs have to go to make it economically viable -- awesome, that would be a second win.
I totally agree. I propose the opposite of what this lawsuit is fighting: let's merge Visa and Mastercard. Throw in AmEx while you're at it. Since the concepts of competition, interoperability and standards are too foreign to people and having too many types of payment processors is confusing, we need to have a single payment processor. That way we can grumble at only a single party when they jack up processing fees for editing database rows or straight up debank us. Efficiency!
\s
> A class action lawsuit alleges Visa, Mastercard and some of America's largest banks have conspired to artificially inflate merchants' credit card transaction fees.
If they didn't conspire together and actually competed then they wouldn't be able to charge such high fees as they would surely try to undercut each other.
Any new competitor could spell the end for them, so making it astronomically difficult to onboard enough people is so far working out for them.
Canada has a debit card network called Interac. Last I checked, the transaction fee was typically a flat $0.10 CAD (~$0.075 USD). There are shops that do debit or cash only, but it's not the norm (typically restaurants and niches with high chargeback risks). I am curious what keeps credit card acceptance high in Canada, despite a very widespread mature card network. I assume part of it is that consumer debt increases spending volume overall, but that can't be the primary reason I feel.
Then, credit card companies take some of their profits and give them back to customers in the form of reward programs.
So we all end up paying more for nothing, but the incentives make it a difficult collective action problem. I don't know why retailers don't take advantage of their right to pass fees through to customers. That would solve the problem. I guess it would make some stupid people angry. And maybe there is some other pressure the credit card companies are using.
Both are true though right? The company needs to be held accountable for price collusion by the government. Government not acting due to lobbying (i.e. bribes).
However, starting up a credit card company from scratch is, extremely capital intensive, extremely bureaucratically heavy, and all the helpful finance players are in bed with or are the institutions you would be upending.
Merchants would probably help, but inevitably would take ownership and steer the ship into their harbor (not consumers). A system where merchants own the payment system would probably be even worse.
This means that the issuer can manipulate the consumer into doing things bad for the business, and the business has no way to respond to the very high fees it is charged.
I know what has happened in Australia and I hate it for the reasons established above.
[0] - https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
even with your optimal strategy, you're still paying for it: those points might as well be already spent at the network of vendors you've agreed to sell your purchase history to
it says so in their balance sheets :)
Second, it appears that you're deliberately conflating "writing a check" with an ACH authorization. These are definitely not the same animal. Yes, a paper check contains my signature and all data points necessary to establish an ACH transaction. No, setting up ACH in an app is not "writing a check" but its equivalent is "handing over a book of blank, signed checks" to the vendor.
It used to be the case, with pre-pay, that you could hand $25.00 to a cashier and they would authorize the pump for that amount, and you just max it out with however many gallons (or less, and return for your change). But in a credit/debit transaction, the little grubby pump-POS (or human) does a preauth for $$$ and then the pump measures out how much gas you actually pumped, and then the transaction settles overnight for the measured amount. If you are old enough, you may recall an American society with high enough trust to run truly postpaid gas pump transactions. Imagine that.
So that really is a blank check. It doesn't matter when you're not using the grubby physical POS or an app. The gas station owner is the final arbiter of how much gas, and therefore how much you owe. Correct me if I'm wrong, but ACH protocol isn't sophisticated enough to have preauth and settle; the vendor will just say "give me $$$" and the account will transfer it, no questions asked.
The consumer won't have a leg to stand on, because it will be the robo-pump that measured out the gas, and you've already, allegedly, taken that amount of gas and put it in your tank, so if you claim that you only pumped a gallon but the pump asks for 30 gallons worth of money, who's wrong?
So all the risk of vendor fraud still exist there. No, a third-party skimmer won't be effective, but I often wonder how many skimmers were installed with knowledge or tacit approval of the fly-by-night owner/operator.
I do not see how an ACH app transaction makes any gas station more honest or accountable from a consumer perspective. But now I love my boomer father even more for keeping his little fuel logbook in every car he has ever driven. I'd like to see him in a small claims case against Sri Singh McSikhface.
I'm not alleging a conspiracy. It's almost self evident emergence given the nature of a company and a government. What is Google to gain for resisting the name change? Nothing. Status quo they benefit from a service that names things according to government convention. Their map wouldn't be very useful otherwise. If the government starts renaming things why do they care? This isn't some cult in the middle of nowhere, the federal government changed the name. If liberals don't like it tough maybe learn how to not choke away another election. Why would Google fight the government on the name change? There is no upside and it's not something they care about. More importantly it's not their job.
The same logic applies to credit cards. You think the MasterCard CEO is gonna risk his plush paycheck so a handful of degenerates can beat off? He doesn't care. It's not his job to decide that question and he doesn't want it to be. If the government wants to nationalize him however, then of course he will care. It's called a trade off and ultimately all successful people learn to navigate them. It doesn't change the fundamental truth in my point that many people blame corporations for alleged sins that in truth are caused by governments. The "Gulf of Mexico" thing and "credit card censorship" being two of many examples of this confusion in our discourse.
I won't respond to you again.
The app itself was deficient in testing, had security issues, wrongly told thousands of people to quarantine, was not as accessible as it should have been, and was overall very mediocre software. If that's what my federal government can deliver (albeit through contractors and middlemen all the way down), I don't want them anywhere near my finances.
Public adoption was mandatory for a time, so that aspect couldn't have failed.
And of course, the Canada Revenue Agency is clearly able to manage people's taxes and aspects of finances safely and securely, but that has decades of effort and tremendous financial investment behind it. A greenfield effort seems a lot less safe, and I trust the public service much less to execute on that coherently, consistently, and effectively enough to deliver something better than we presently have.
This will mean, its harder for competing payment services to function. And its easier for the big credit card companies to up the % they charge without the public noticing, or blaming them directly.
It was fascinating watching the media coverage, twisting themselves in knots to miss these points while cheering how we were 'standing up to the big cc companies', it was actually quite cringe-worthy at times.
E-ZPass now has interoperability with the Central United States Interoperability Hub (which reaches as far west as Colorado and as far south as Texas). We're much closer to the point where you can drive anywhere with a single transponder than we were back then. The main thing missing now is California cooperating with anyone else.
I like the idea of my toll road account also being useful for public transit, if nothing else. But it's difficult to imagine toll road operators and public transit operators seeing a big incentive to cooperate in that way. Even though they're both "pay for transit," their intended/typical users are very different (people who can't/won't drive vs. people who not only drive but are privileged enough to pay for less traffic).
So really, you only need one state to adopt your unified transit fee idea.
Halifax, NS used to have bridges where the toll transponders worked to pay for parking at the airport - super convenient. Alas, they've since removed the tolls on the bridges, so the transponders are now useless and traffic in the downtown is even worse.
You are merely noting Google Maps has an imperative to be useful.
The notion of a street name is meaningless if they all have the same name. It doesn't change the fact that it's not Google's job to name them. If the government did that and postage and signs eventually changed, one would expect Google Maps to likely cease to refer to street names at all.
I often find when traveling in unfamiliar areas giving me a street name is a profoundly unhelpful manner of instruction unless there is adequate signage, and there often isn't. A more reliable way is to say something like "make the turn at the stop sign" or "at the third light". The idea that it's Google's jobs to name things as if they don't rely on a sensible state is just nonsense. If the government turns into Alice in Wonderland at the end of the day Google Maps cannot exist. Google doesn't just assign a random name to every street or deliver the mail. It's not their job. Your strawman doesn't change that it just asks what would a company do if the government went completely off the rails. It doesn't change the fact Google doesn't bear responsibility for naming these features in the first place.
All I know is that for the chargebacks I've gotten for my saas, I submit a mountain of evidence that the user used it heavily and then filed a chargeback after the subscription ends.
Most of the times paypal will even agree the customer scammed, and they say they will talk to the credit card company on our behalf. However we have never once won one of these chargebacks if it was done with a credit card. Then paypal proceeds to remove the money from our account and tack on a chargeback fee.
Since this exchange isn't of relevance, I won't respond further.
I'm not gonna say it's anywhere near perfect, but that friction significantly changes the average outcomes
No, governments do not spend money on producing cash. They make money by printing it. The net value to the government of printing money is positive, not negative. (And in our current financial system, they distribute much of that value to financial institutions and the rich people who own them--which was the original reason the Federal Reserve system was put in place, due to intensive lobbying by the rich people at the time.)
Tourism is the world's largest industry.
It’s not free for the business either. Businesses doing cash discounts are quite likely not reporting all of their sales IMHO, so it’s better for them because they can dodge taxes.
Dealing with cash, which is a dwindling percentage of sales, has become more expensive than the card fees.
Feel free to ignore this question but what have you noticed going about life without your head in the screen? It must be a genuinely different view on things and I would like to get your perspective
The closest comparable thing is that I've gotten kind of hooked on listening to podcasts while doing chores. It's highly addictive and now I feel uncomfortable doing without. But when I do eschew the podcasts, I end up doing a lot of processing of my own thoughts that's probably pretty valuable. Kind of like shower thoughts, I guess.
As long as it's part of the advertised price, im ok with that
What does Europe do here? They at least add tax into the list price which the US can’t seem to do because reasons.
> Traders in the EU are not allowed to charge you extra for using your credit or debit card. The only exceptions to this rule are American Express/Diners Club cards and business or corporate credit cards, where your employer is billed instead of you. If you use these cards, you may still be charged a fee but the fee can't be more than what it actually costs the trader to process your payment.
https://europa.eu/youreurope/citizens/consumers/shopping/pri...
That is the crux of the problem though. By adding fees and then contractually forbidding merchants from passing those fees on to credit card customers, it is forcing non card users to pay for card users fees since the fees are embedded in prices. Plus they're even giving card users kickbacks in the form of points. So non credit card users end up paying more credit card fees than credit card users which is nonsense.
> So non credit card users end up paying more credit card fees than credit card users which is nonsense.
The business just makes more money on cash transactions. It would be interesting to find if the cost of cash handling/losses is comparable to the card processing fees.
It is no longer permitted for payment networks to prohibit discounts for cash or surcharging use of credit.
A few of the merchants I use regularly have credit surcharges now. It's pretty common at gas stations near me. Almost all business with my state or local government has a 3% fee for card use.
https://usa.visa.com/content/dam/VCOM/global/support-legal/d...
> If the dispute is valid, the acquirer deducts the amount of the dispute from the merchant account and informs the merchant.
Also, keep in mind that companies like Stripe will not only recover the disputed amount from the merchant but will also recover a fee from the merchant!
its cheaper but customers lose protection for doing it, and as its illegal (yes, against the law) to offer them a discount for using debit cards, cash, or direct payments they have no reason to.
But the problem is that if you use it to pay for a service and do not get the service you can only claim off who you paid and that requires taking them to court while Credit Cards just require phoning up the card provider. Debit cards are between the two.
I have not actually used it. I have paid some people (mechanic, gardener) with a bank transfer which works well thanks to faster payments being near instant.
To me, surcharges should not be allowed. The sticker price the customer sees when they decide to buy ought to be the price. This makes comparisons much easier, and enables more competitive pricing.
of course not. That's absurd.
I want a single price, regardless of my choice of method of payment. The cost should be built-in to the price. If the cost of providing one type of payment method is too high, i want the business to take out out to make their price more competitive (balanced with the amount of people unwilling to shop there without said payment method).
Merchants and payment providers compete to provide payment methods at as competitive rates as possible, because they needs to compete with cash handling (which isn't hard at all), and the consumer doesn't think about "cost of payment method" - they merely need to think about the cost of the item displayed.
This was a moving company that insisted I should use their flat rate package and 3 movers rather than the 6 hourly I asked for. It took forever and they tried to charge me extra fees.
The lengths insurance companies will go just to avoid adding to a deductible are, given the circumstances, rather disgusting.
They don't seem to produce any savings. Are credit card companies much different? Why are their CEOs making millions of dollars? Is it all supposed to be because of innovation in preventing fraud?
As with health insurance companies I too have found in reality their way of dealing with these things leaves much to be desired. The way they treat it seems transparently like health insurance - add minimal value upfront, then wear you down so you never actually get the service or "value" they were supposed to provide in the first place.
That shitty service is the margin padding that multi million dollar salary. Where's the innovation?
I literally had a bike rental company in Amsterdam attempt to get me to conspire to report a bike stolen (which had briefly been stolen but was back in my possession), and then when I refused, charged me as if the bike had been stolen!
I reported all this to Amex, and I was never refunded, and to my knowledge, the attempt fraud was never investigated.
Trying to understand what you mean by disproportionate here. Are the majority of transactions well under $10?
So it is not based on a portion of the fee (a percentage of it). Disproportionate.
This is bad because it systematically penalizes small transactions, which a proportionate fee does not do.
What there aren't are rampant cash-back rewards for using a particular card. Or easy access to credit cards with usurorious rates. I think missing out on those is a societally good outcome.
What does that have to do with CC fees? In the EU, you get all of these with any payment method, and in many EU countries credit cards are the least used payment option because there are better alternatives.
I could make this exact same “price controls” argument about sketchy loan sharks that charge 200% interest.
Perhaps ensuring widespread access to credit cards isn’t actually as important as making sure credit cards are fair? Alternatively, perhaps your theory that credit cards would become inaccessible if transaction price controls were implemented wouldn’t play out? Perhaps we would discover that Visa and Mastercard and Chase Bank and Capital One would be perfectly happy collecting 0.5% of every transaction on the planet plus revolving interest charges?
I will reiterate my overall point: we have tried market-based solutions and the end result is that capital is concentrating itself at the top at alarming speed. Credit cards represent a huge oligopoly business. There is no free market situation where a new credit card company will enter the market. It is no longer possible. To the contrary, the market has only consolidated. E.g., Capital One purchased Discover Card in 2025.
How much longer do we let the market work itself out before we decide we’ve had enough trying the same ineffective strategies?
Dan why can't I post more comments?
You as a real human should have a right to have a bank account and to send and receive money. Just as you as you as a real human should have a right to access any other basic utility.
Your business should not have any such rights. If the power company doesn't want to provide your data center or steel factory with electricity, then your business shall have no right to it.
If a card payment company doesn't want to provide their services to your brothel or your weapons factory or your weed shop, then your business shall have no right to it.
I used to by all my PC parts from a shop that had a 5% discount for cash purchases. It was the sort of shop that was just a counter with all the merch hidden in the back. I don't know how they kept the CC companies from knowing but maybe 40% of their business was cash purchases (circa 2019).
We must be very different consumers.
Also, many places already do effectively this, they charge a surcharge for using a card.
For those on the other side of the balance, maybe it would be.
Either way, I can't imagine many shops doing it, even if the economics makes sense. They'd rather the immediate and direct pad to the bottom line.
The app even has a warning that Zelle is basically cash, and you really shouldn't expect any reversal.
So I dug into Zelle reversals one time when a landlord stole my security deposit and I was considering reversing last month's rent until small claims figures it out. Banker said Zelle charges aren't normally reversible, but reluctantly admitted they are required to reverse the charge if it was unauthorized. Had I lied and said someone hacked my account, it may have been reversed, but then I'd be committing fraud.
Cashier's checks too. Despite what everyone says, they are reversible under the right circumstances. TurboTax's refund processor did that to me because they thought my address was wrong or something.
As I said, the fee you're paying if you use a credit card is for financial intermediation. That's not just "giving someone money" or "collecting money". There are other things included that have significant costs to provide.
> They provide a valuable service
And that means all your rhetoric about "charging a rake", "tax", "parasitic toll collection", "tithe", etc. is misplaced, because those things all imply that there is no valuable service being provided.
If you want to argue that there are ways to reduce the cost of the valuable service, for example by competition, that's one thing. But that's not the argument you're making.
3% of transactions is an incomprehensibly large amount of cash. The systems that exist to transact cash have been in place for decades already. Major countries have already developed their own payment systems because they understand the problem and the cost to society. Most of these are entirely free and AFAICT, they work just fine.
> for example by competition
Sure, if you set up a time machine. Even in that case, there would be no meaningful competition. Someone else would simply occupy the position in the middle of the intersection instead.
"Parasitic" and "toll collection" remain accurate descriptors. What about "entrenched" and "monopolistic"?
Why have almost all European leaders come to grovel before an American President they clearly despise?
When you can defend your own continent without the sight of your governments prostrating themselves to such a man I'll take your claim more seriously. Europe has been asked for decades now to act more responsibly. Now you are being forced. Instead of blaming America let's see if you guys can cobble together a path forward with waning American guarantees without recreating the internecine strife that led to the American intervention in the first place.
Nothing I am seeing out of Europe gives confidence over the next decade. Hold your own governments accountable.
Returning a defective product to one store, only buying things when you have coupons or promo codes, or issuing a chargeback at one business can get you instantly flagged as a higher risk at countless unrelated stores who are using the same services. Other factors that can impact your score include your income level, your home address, the devices/software you use, your interactions with websites (for example going directly to the product you want instead of searching and browsing around, or pasting your information vs typing it out is considered suspicious), how much money you spend, inconsistencies in the personal information you've given to different businesses, even your attitude when dealing with employees and how much of their time you take up can negatively impact how you're scored since that lowers your expected profitability (CLV/LCV/LTV) which lowers the tolerance threshold for risk.
At least Yelp is public and companies can see how they are rated. Businesses typically won't tell you that you've been branded a high risk for fraud or chargebacks. Instead they'll just apply different prices and polices to you on an individual basis. They might tell you that don't accept certain payment methods. They might tell you they don't accept returns, will only give store credit, or give very narrow return windows. They may reject your business entirely or limit you to only a subset of the products or services they offer.
Just to give them some space, I'm using a different service, which is no better. They are all horrible, overpriced, and the drivers DGAF, and so I am routinely triggered into this rudeness they complain of. Recently I had another episode where my drinks went missing. Consistently. And so a couple of times, I pursued a tip reduction through the app or through their Support or whatever. Their Human Support Agents swore up and down that I should be able to zero the tip in my app. I swore up and down that there was no option at all for this. I raged and stressed so hard about this. The app kept claiming it was Human Support's responsibility to reduce/zero tips. Human Support swore that they were unable and disempowered to do such a thing.
I finally resolved this with an LLM conversation. The LLM revealed that "some customers are flagged as high-risk and their ability to reduce/remove tips will be disabled by the platform." This made perfect sense why the CSRs all believed that I should have the option, but it was disabled "for security reasons". It was appalling to me that they considered me "high risk" of stiffing a driver. Because I have always been very very careful to take care of drivers' tips generously because I sort of understand what they go through, even when a small percentage are overt assholes and DGAF. They mostly still deserve their tips and wages.
But the platform removed my ability to penalize them and reclaim my discretionary funds from a gratuity paid in advance and that really, really infuriates me. There is, of course, no way to start at $0 tip and increase it, because the drivers will simply decline to even claim your order in the first place. Because gratuities in advance are an incentive and bait to claim orders. They are not tips, they are bribes.
The value they add is much greater than their costs. People who deny this lack a lot of imagination to ponder how inconvenient things could be without credit and debit cards.
But we don't need to imagine: If Visa and Mastercard didn't add more value than they cost, then merchants wouldn't accept them. It is still 100% voluntary for a merchant to decide if they want to accept cards or not. Which is a freedom they should have. These cards aren't legal tender.
> If Visa and Mastercard didn't add more value than they cost, then merchants wouldn't accept them.
You are trying to pervert words and the concept of freedom in a quite uncanny way - for nobody's benefit. Most people and business owners aren't living within a mental prison where they oblige themselves to min-max everything in life and make all decisions according to a fantasy of rationality. Many of them refuse to accept CC payments, even if it might be in their best interest to.
Once you have sane system like pix or upi, there is far less need for chargebacks and frauds.
Which payment method would you prefer to use for an online purchase: One where you have no chance of getting your money back if it turned out to be a scam, or one where you have protection against this?
it's possible that with the fees removed cards still have rewards because the premium cards still want your business (they have other mechanisms for making money than just interest + fees, cf https://www.bitsaboutmoney.com/archive/how-credit-cards-make...)
however I maintain that credit card rewards are a net drain on society. Paying for things should just be paying for them, not a complicated system that generates fake money points that you can then turn around and spend in bizarre ways if you remember to. The whole system is stupid.
The current status quo is a result of free association. If people prefer to have credit card debt or use rewards programs poorly then I have no issue with continuing in this manner.
This doesn’t make any sense. So the price should include potential transaction fees for the most expensive method of payment? Or you want the cheap payment method to overpay and subsidize the expensive payment method?
There’s also usually a flat fee plus a percentage, how do you bake that into the advertised price when the flat fee may be spread across multiple items? Should every item increase in cost by $0.30 or whatever?
This is just stupid. Advertise the cash price. You can go to an atm if you don’t want pay the fees associated with your preferred payment method.
I gave up on them when the IRS discriminated against debit for identity verification when applying for COVID EIP.
I bet most people paying by credit are really using debit cards, but pick "credit" at the register because they don't want to enter a pin. Partly for security, but mostly because credit is faster/easier.
Anything optional that skims off the top cuts into profits extremely quickly.
Businesses which accept credit cards get the business of customers who want to use credit cards. Those which don't, do not. Me? I want to tap my watch, get my 2%, and leave. I do not want to reach into my pocket, extract my debit card, and enter my PIN. Not a dealbreaker, I do business on the regular with two places which are cash and debit. But it's my preference.
Yes, there is an underlying coordination problem here. The major payment networks are quite probably engaging in anticompetitive behavior, as the lawsuit we're talking about indicates. But this does not, at all, mean that businesses which accept credit cards are penalized financially for that decision, on the contrary, in expectation we would find that most are rewarded for it, on the simple evidence that most of them do, in fact, accept them.
Separating it from any other costly incentive to do business, free samples, flyers, discount sales, loss leaders, is just special pleading. A cost benefit analysis includes costs and benefits, or it is unworthy of the name: and customers doing business are a benefit to that business.
The other thing is, why are we separating businesses and people at all here? I wasn't talking about rights that groups have, this is about the obligations of a provider. If you're in the business of processing payments, you process all legal payments - that's it. It is what you do, it's the business. It is not their job to care about what organizational structure is behind the payment any more that it's their job to care about the gender of the payer. I simply don't see the relevance.
The line you want to draw also doesn't make any sense. So, say I provide services to other individuals. If I do it through my real name and self, it's alright, but if I pay $20 to register a sole proprietorship, I lose my 'rights'? Why?
> If the power company doesn't want to provide your data center or steel factory with electricity, then your business shall have no right to it.
Payment processors are far more egregious than that. They don't create anything like the power or water company does, they are middlemen. It's like if the power company and my business agreed that I will pay them for power and they will supply me with power, but a middleman who handles the transmission lines goes "nuh-uh, I disagree" and cuts my power line. This is how payment processors work. I want to pay someone for a legal good or service, they want to provide me with a legal good or service, payment processor says no.
I can't express enough how much I don't understand wanting to deny businesses the 'right' to financial relevance while going full-steam-ahead on giving businesses the right to pick-and-choose customers based on their whims when they're providing a universal service that society relies on.
Nowadays for the first purchase for a merchant it can require me to hold my card to my phone to prove that I have physical ownership of the card.
Fraud in modern financial systems is kind of.. funny? obvious? Local banks who know who Bob is can't make enough money due to scale, we'll scale that system to a national level with millions of participants. How will we do that? Bob is now customer 11,476,112. Oh no this anonymous number we created cheated us because we didn't know who he was, what do we do? Charge Bob and everyone else for the cost of this, our scaled up business model wouldn't work otherwise. We'll skim 3% off of every financial transaction infinitely, so that after our $100 virtual bill has changed hands 30 times it has disappeared into our coffers.
It used to be here in the US, but there was enough violations that they stopped putting it in the terms.
But, looking into this, it looks like some states have made it illegal. I'm curious how well that's enforced.
> Fraud-related costs are also one of, if not the largest single contributor(s) to payment processing fees.
That's not true. Fraud (counting both prevention and losses) accounts for less than a quarter of issuers' interchange revenue: https://www.federalreserve.gov/paymentsystems/2023-interchan...
(yes, Wero, Vipps etc, but Visa/MC are still huge in Europe)
No they don't. We're not talking about lemonade stands here.
Business owners don't have a choice. They must use CC processors or else lose their business. That's the point.
You're shoehorning a philosophical definition of freewill into a context where it doesn't apply.
Given that consumers and businesses have "freewill" or "freedom" to make any financial decision, then by your logic there are no bounds a company can possibly transgress.
Why do you think we have anti-trust laws, or consumer protection laws, or the FDA, or have litigated against monopolies in the past, or have the host of many other things which protects consumers from being taken advantaged of?
Exactly. And not even bribes that give lasting benefits. I used to make sure when I moved into a new place to tip a little extra at the door, especially when the restaurant is close by, because drivers would remember and it could make the difference between being the first or last house they stop at, but now even when you place your order directly with the restaurant it's often some random app using non-employee who shows up. All the food delivery apps are scammy. I've increasingly resorted to driving out to order and pick up food myself. The food is hotter, the prices are lower, and there's zero fees.
Good luck.
I don't even use my debit card for anything, it all goes on a credit card because it's a lot easier to fight a fraudulent charge.
The only difference is that you're potentially out your own money, but with credit cards you're also out of credit until the dispute is resolved, and you can have multiple debit cards and checking accounts just like you can have multiple credit cards as a backup.
I'd rather not be in the situation where I have to realise my "legal right" to ACH chargeback — which will involve hurdles, wasted time, and probably also legal fees — by not giving anyone the authorisation to perform ACH pulls in the first place. Cash works best for this — you're never out of more than what you hand over — but Apple Pay gives me similar protections.
That doesn't sound like a huge PITA to you that could just be avoided by not giving them that access in the first place?
Evidence of high levels of power political pressure - US latest 25% tariff pressure came out explicitly around this topic - https://www.reuters.com/business/finance/brazil-us-clash-ove...
With visa and Mastercard you pay transaction fees and rent for a card terminal aka card reader, which are lower or non existent with these homegrown or local P2P payment systems. Outside western developed countries aka the US and the richest European countries like France, Germany, that's enough to stop using visa and Mastercard.
Took me 2 visit to fully setup. First visit to India, they are like I need a debit card. I hate debit cards, but I got it. Which got delivered to my US address. When I got there, they are like I need Indian number and I have to do KYC to update. 3rd visit, I got everything working. At that point, they also let you use US number. But I wouldn't recommend US number as roaming is expensive if you have ATT.
You also have to disable developer mode and can't root the device.
If I bake cakes to sell them, and have to pay 3% to a network for each purchase, then that 3% is in the price of the cakes.
I, as a cake seller have a cost i need to pay to the network every month, from my total revenue it's some percentage (depending on ratio of cash vs card). I obviously add that percentage to my cake prices to make up for that. Both cash and card payers pay the same amount for the cake, thus they share the price hike equally.
In Brazil, you'll typically get a "10% discount" when not paying by credit card.
Eg, it's very clearly pushed unto the consumer. I assume some law says they cannot charge more for it, so they got a default price, but always advertise a lower price with a small text "if paid via pix"
Are ACH returns really that difficult to initiate in the US? I've fortunately never had to do one, but in SEPA land, it's usually a single click in online banking, or at worst a simple message to customer support.
Fraudulent ACH transactions would be a federal crime if you found a pathway to do them, and you'd probably be tracked down pretty quickly because unlike crypto, ACH transactions are fully trackable and auditable between accounts that have identified owners.
To be clear, this fraud happens similarly to credit card fraud: Fraudster F gets accountholder A's account and routing number, opens an account with merchant M and racks up a bill; M charges A, A reports an unauthorized payment to their bank. Usually M ends up eating the loss.
No, ACH authorisation is an entirely different matter. I could agree to show you the check I wrote to my landlord, but I'm not willing to give you my check book with my signature — and no other data — on all the blank checks.
ACH authorisation is an analog of the latter, not the former.
You can then easily dispute them, but I'd still call that "access to your account".
To be fair to Mercury, they are quite open about this fact.
In any case, my politics demands not depending on the bureaucracy of a big corporation for legal redress.
[1] https://www.stashfin.com/blogs/dispute-upi-transaction-guide
> Why would any system of payment not have a chargeback mechanism if someone stole from you?
I couldn't agree more.
I only notice one problematic thing there in your link: Wrong recipient. And it says you cannot get your money back without the cooperation of the recipient. With card payments you never risk paying to the wrong recipient by typing a number wrong or such.
There is a trade-off. Many systems do offer the ability to get your money back without the cooperation of the recipient. But those systems are also filled with the scam, where you send someone money, then convince them to send the money back manually, and finally reverse the original transaction.
You can counter this by more policing of these types of scams, but usually the amounts in each individual case are small, so police have very little incentive to do anything about it.
The legal right to have unauthorized payments returned is ultimately backstopped by law. This is the case for both credit and debit cards. That (and scheme rules) is the reason you don't have to shop for the "most chargeback friendly card" or similar.
> Apple Pay gives me similar protections.
How does Apple Pay factor in here? It's just a different way of using your existing credit and debit cards, with exactly the same dispute protections.
In theory; in practice, one reliably and repeatably works, and the other I'm not sure (and not willing to find out.) I've had some experience with stolen checks; while the money has been ultimately returned to me, it was a major hassle, and cost me several sleepless nights.
> How does Apple Pay factor in here?
Apple Pay gives the merchant a generated CC number (per-card, per-device) with a generated one-time security code (for every single purchase.) If the merchant is breached, all the hackers are getting is a generated CC number and a (expired after single use) security code, so they can't charge my Apple Pay card at all — and of course not my real card (which has never been exposed to the merchant to begin with.) The easiest and fastest chargeback is when there is no charge!
What's the difference between that and somebody's only credit card getting maxed out by fraudsters? They also can't use it until they receive a provisional credit by their bank.
If your point is that a credit card separates rent from other payments, nothing is stopping you from having multiple checking accounts either.
The takeaway for me would be "don't bank with a customer-hostile bank", though, not "hope that the credit card department of your bank is better than the average of the bank".
As an example: fintech builds front end that takes deposits from user, but not much more. The deposit passes to an intermediary that pools deposits and puts them in FBO accounts at a real (FDIC) bank. Intermediary collapses. Now neither the bank nor the fintech know who had what.
This is exactly what happened when Synapse collapsed (which impacted Mercury at the time too)[0]
[0] https://www.yalejournal.org/publications/the-synapse-collaps...
https://www.retailbankerinternational.com/news/occ-grants-co...
https://www.linkedin.com/posts/mercuryhq_big-news-not-a-bank...