The most confusing thing for me is why. I have read a few theories, but nothing convincing. What could be a strong enough motivator to do such a bizarre thing?
Also we need governments to keep them in line. We cant have private corps acting as de facto censors like that. Its completely undemocratic and unethical.
Here in Australia, most places accept UnionPay as well as Visa/Mastercard - but I don’t know if any local banks offer UnionPay cards, [0] I think this facility is really targeted at visitors from mainland China. And if a cafe takes UnionPay, that’s just because the cafe’s bank accepts it, and why would the cafe refuse if the bank allows it? A lot of places refuse to take Amex even though their bank does due to its high fees, but I don’t believe UnionPay has that issue. A lot of places take JCB, although that’s not as widely accepted as UnionPay is-in Australia, JCB is handled by Amex, so a lot of merchants will refuse JCB (even if their bank accepts it) due to the same concern about fees. Diners Club used to be accepted in Australia too, until they pulled out of the Australian market last year (I think overseas Diners Club cards are still accepted by some places as Discover, but few in Australia have ever heard of Discover)
I used to have an Amex credit card issued by my bank, and I used to use it all the time-they’d kick back some of the extra merchant fee they got as extra frequent flyer points/miles - but Australian banks stopped issuing Amex when a regulatory change in 2017 significantly reduced how much money the issuing bank could make from them
I don’t believe the situation for online retailers is hugely different-if your bank supports UnionPay/Amex/JCB for in-person transactions, they likely do for online transactions too
[0] Bank of China’s Australian subsidiary apparently does issue UnionPay cards to Australian residents, but I doubt they’d get many customers except for immigrants from China-most Australians would never even consider applying, and they’ve made no attempt to market it to the average person
It seems extra illogical when you think of how much money they make from subscription adult websites, even brothels-in countries that have legal brothels, I think you’ll find many of them accept credit cards, and Visa and Mastercard don’t appear to have a problem with that
All of those sites use high risk payment processors if they go through the major card networks.
I told him to stop, because I was worried that too many refunds might result in Valve taking action against the account
Still, why bother with a chargeback when the vendor has a generous refund policy?
Money. The only two motivators for a capitalist entity are making money and avoiding any government interference with making more money.
They certainly aren't doing it out of Christian principles.
Said Evangelicals unfortunately know how to raise a stink, and with stinks comes bad press or, even worse, haphazard attempts to regulate stuff. Or, under Trump, it might draw the ire of the Dear Leader himself and suddenly even a company like MC/Visa finds itself in hot water.
Either of these results is expensive, much more a cost risk than the profit of something like Itch is worth.
> In particular, the TVPA imposes criminal liability upon corporations that benefit financially from human trafficking in “reckless disregard” that their business ventures engaged in such exploitation.
Not that digitally generated tits and asses have anything to do with human trafficking. But for a payment provider, porn sites are risky because their upload filters can miss content that violates these laws..
Russia's exclusion from Visa/Mastercard means cards there are on the Chinese networks and Russia's internal one.. it'd be interesting if adult content providers adopt these, bur I guess that means working with a Russian financial institute, which risks embargo from the US.
Imagine that, your porn stars ending up on the US embargo list...
Meanwhile, on the topic of human trafficking, Trump is panicking about being in Epstein's files...
Visa doesn't give a single shit about porn, porn generates a lot of fraud and chargebacks that cost them money.
Most people I see complaining about how "unethical" it is are the ones who got kicked off the card networks for very good reasons like fraud or money laundering, or they got themselves on the MATCH list.
Banks, which constitute the majority of both payment networks, are not "enforcing archaic puritan ideals on the whole world" nor acting as "censors."
> The most confusing thing for me is why. I have read a few theories, but nothing convincing. What could be a strong enough motivator to do such a bizarre thing?
There is no need for theories regarding the inability to sell "adult games on Steam or Itch.io" as the answer is simple. Banks have identified this particular line of business to exceed their risk tolerance for any combination of:
Chargebacks
Fraud
Money Laundering
That's it.
As for the linked article, it reads too much like AI slop for me to be bothered to analyze any of its specific points. If it's not AI, someone please correct me.
Instead we need antitrust legislation to look at unfairly favoring one's own service, attack bundling, and prohibit exclusionary practices/blocking access to protocols (Private APIs, basically Apple).
To use Apple as an example, we could legally mandate they provide APIs for third parties to access iMessage, AirDrop, SharePlay, etc. on their OSes so that third parties can offer accessories and services that compete on the same playing field as Apple's own accessories and services. Without mandating that openness, there can be no competitors. I can't make a smartwatch for iPhones and have it able to compete with the Apple Watch, Apple just simply gatekeeps and won't allow it - that should not be legal. Likewise for wireless headphones - no one else can make a set of wireless earbuds that can do device switching on Apple devices to the same level as AirPods, because Apple is gate keeping with proprietary tech.
The non anti-trust aspect of it with tech is mostly network effects. For mobile, the more users, the more apps, the more valuable that platform gets, starts to incur high switching costs, devs neglect or ignore any potential new entry into the market because it's not profitable to build for it, and that momentum is very difficult to overcome without regulatory action.
The US sued (presumably on behalf of VISA and MasterCard) and won in 2012: https://ustr.gov/about-us/policy-offices/press-office/press-...
MasterCard just started being full offered in 2024. VISA still has not. In the meantime, China built their own dominate offerings, essentially avoiding the duopoly.
You do indeed have many systems in different countries in the EU. The problem is that they don't interoperate, and the rebooted EPI has had to scale back its goals. Its goal now is to offer a digital wallet and P2P transactions, with a card scheme only in the distant future.
In the EU, card payment fees are capped at 0.2% for debit cards and 0.3% for credit cards. In the US, these interchange fees are about 2%.
US businesses pay over $100 billion annually in these fees to card networks. If the fees were capped like in the EU, 85% of that money would stay with the businesses rather than feed the duopoly.
How do the account fees compare between EU and US?
There is also regulation in place that restricts predatory fee practices, getting customers into revolving debt and protection that makes card issuers liable for purchases (Section 75 - e.g. if I order something paying with my credit card and the merchant doesn't pay, the card issuer is legally liable / I can claim from them and its on them to get it from the merchant)
And then the fact that banks and card companies are charging merchants a fee for transactions and have margin to give back some of those fees to the customers.
If you have a job, your bank should give you a premium card and then you will get cash back instead of having to pay your bank. If your bank doesn't offer this, it's just a matter of switching to any European bank of your preference.
I would be very interested in this as well.
My understanding is that cashback cards of the type we have everywhere in the US (e.g. Amazon Amex = 5% back on Amazon purchases, Wells Fargo Active Cash = 2% back on everything) don't exist elsewhere.
Another example: I just earned $1000 from Chase Sapphire as a new customer bonus for diverting $5K of the spending I would do elsewhere on that card over three months.
Basically, in EU you have low fees, so credit cards are boring, they offer almost zero perks (because there's no money to finance those). No one really cares about what brand of card they get, only about their credit limit. In the US you are charged high fees on every purchase, and then the bank uses your own money to bribe you, or encourage particular types of (excessive) spending, or just make you addicted to credit card debt.
On the contrary, for someone like me who pays off my balances each month, if I get 2% back for every transaction, I am breaking even on those fees if assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that. So really, I come out slightly ahead.
For something like the Amex I mentioned with its 5% back on Amazon, I am coming out well ahead.
> and then the bank uses your own money to bribe you, or encourage particular types of (excessive) spending, or just make you addicted to credit card debt.
Oh, good grief. So EU credit card companies don't do this? I had no idea they offered cards purely as a charitable venture.
I love how you stacked up all those sins just on the US side. Keep this sort of /r/AmericaBad nonsense out of HN.
No, as I said, they don't because of the interchange fees limit: they simply don't have money to finance any perks. Sometimes you get travel insurance, with the card that charges 200 EUR annual fee, sometimes you get some rewards program, where you collect the points, but those points are typically valued at 0.0001 cent, so no one really bothers earning them. Credit cards in Europe are really boring, commodity products, not status symbols or coupon books.
> assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that.
You are paying that one way or the other: merchant will pass their fees on you by raising prices.
Why would someone pay EUR200 each year for that credit card, then? Why does it exist at all? The only US credit cards I know of that have fees have fees because of their (huge) benefits.
You, of course, pretended to not see my pointing out your laughable math regarding fees versus cashback even though I said up front that I get 2-5% back.
If your credit card gives you 2% cash back on everything then obviously interchange fees charged must be just a tiny bit higher. [1]
As for 5% cashback on Amazon purchases (or similar promos) that's a completely different business model: the card is co-branded by Amazon, so it is Amazon that eats the cost of cashback, hoping that they will make up for that from your increased spending. That's why cashbacks higher than 2% are always on specific categories, or even specific stores/product brands - because bank needs a partner to eat the cost.
[1] https://www.wellsfargo.com/biz/merchant/payment-processing-p...
Sabadell: No fees no perks for CC
Bankinter: No fees no perks for CC
Ing: No Fees no perks for CC
BBVA/Santander: Offer an Iberia cobranded card, 9k avios on 2k EUR spent on first 4 months, Iberia Silver Status, 1 point per 3 euros spent, 90 EUR annual fees
Caixa: Vueling card, slightly better avios earnings than Iberia card, some minor vueling perks, fast track at airports 90 EUR annual fee, also a Lufthansa card that offers 7k bonus miles, 95 euros annual fee, no info on miles per euro spent
Amex: Only worthy option, 1 mile per euro, 80k welcome bonus, unlimited lounge access, 400-500 euro credit welcome bonus, 250 travel bonus(used to be flights/hotels, now just hotels), fast track at airports, 780 euro annual fee, network in Europe is growing but I'd say still not accepted at places 50% of the time in Spain.
Revolut: Ultra could be the only comparable option to Amex that it offers unlimited lounge access and 1 point per euro at 660 euros annual fee
So yeah, the only option that actually gives you something is Amex, as the Iberia/Vueling options are laughable and the only reason why you'd have the free CC from other banks is because they are free.
I think most banks only offer if because customers needed credit cards to order stuff on the internet. Before that they were very rare here.
Edit: I meant the credit is free but I pay like € 2 / month to have my card. So maybe that’s their profit.
Given that, and given the necessity of there being some amount of fees to support the credit-card infrastructure, the question for a consumer like me is whether I come out ahead on balance. I can pretty clearly say that I do for the Amazon Amex, and believe that I do for the Wells Fargo.
Credit card companies aren't stupid, they offer a few loss leaders but they make it annoying and time-consuming to come out ahead. And most of the big perks are one-time only, they have gotten much better at banning "churners".
Not my Sapphire. $95. Undecided on whether to keep it or change to another type (I'm not a churner, so 5/24 is not relevant). Also undecided on whether to keep the 100,000 points sitting in the rewards balance for the time being, or cash it out to the aforementioned $1000 now.
Actually, you can get no fees at any ATM
When we use language that evokes the mechanisms of state and implies they'd be used to enforce a monopoly power, we imbue that power with the gravity of those mechanisms, and further entrench it as a "way of life." We should be especially careful of that when said monopoly/duopoly essentially creates and enables a private taxation of the primary source of credit to many in the world!
My vague impression is that the studies on these questions are mixed (am I wrong? A quick Google found several EC funded ones which I'm a little suspicious of). Note that the US has 4 credible payment processing networks but the fees have remained constant. My suspicion is that 3ish% is the optimal value or a very large anti-trust investigation (not a price cap) is in order.
MasterCard and Visa are more like clearinghouses. The decision makers are their members having "access to the rails", issuers and processors, which are either banks, subsidiaries owned by banks, or companies sponsored by the aforementioned two (which very often includes one or more banks getting an ownership percentage).
A better way to look at these networks is to understand two things: the first is that at one level, they’re an insurance business that makes a profit from insuring against fraud, and reducing fraud would reduce the profit margins they can make from that business. And a second way to understand them is as guardians of a hugely profitable network portal that’s very hard to compete with, and they’re charging as much as the market can bear for that service.
EU partially solved this with PSD2 enforcing two factor authentication for online card purchases.
https://finance.ec.europa.eu/publications/strong-customer-au...
(I'm open to the idea that this is a market inefficiency that needs government correction - but you need more than just saying "3%" to prove that)
A simple way to determine whether “look, the burden of proof is on you to prove this is abusive” is the correct standard is this: try to get precise details on how much the underlying service costs, how much the various types of revenue are shared between card processors, Visa, and issuing banks. You’ll find that it’s almost impossible to get a clear picture of those details without signing an NDA. But if I’m wrong about this, come back to me with it and we’ll discuss how to use it to evaluate whether the fees are reasonable.
Why do you have this particular suspicion when you claim you haven't actually looked into ~any of the questions you raised?
It doesn't, EU uses card payments much more than the US. So end of discussion there, it got cheaper with no negatives, just positives.
https://genderdata.worldbank.org/en/indicator/fin7-t-a?gende...
(also, you answered - incorrectly - only one of the questions that I brought up)
We have VISA and Mastercard with debit, not credit, so it works everywhere.
Note, I am not suggesting that is a bad thing, I fail to see largely how its a bad think but perhaps I lack enough understanding to see why people not loading up on credit cards is a negative.
Yes, but that's because credit cards aren't needed in the EU (you don't need to build credit, and you get the same protections on both). So it's useless to try to focus on credit cards in particular, it only makes sense to consider debit+credit.
So there isn't the concept of insurance as far as I understand.
Not to defend the credit card companies in the slightest.. but its a bit apples to oranges
The only plus side I can see is that you can buy stuff from shady ass websites and sleep comfortably knowing you can do a chargeback later.
PayPal/CashApp have zero transaction fee as well for person-to-person transfers.
There is a major EU effort to develop an alternative 'instant payment' system that doesn't depend on Visa or Mastercard called Wero [1].
[0] https://www.ecb.europa.eu/press/pubbydate/2019/html/ecb.card...
In the same vibe you have Lydia in France that is successful.
Wero is technically from Benelux as there are origins in Belgium, Netherlands and Luxembourg. There are also other initiatives in Estonia, Finland, Sweden, Denmark, … to create alternative card payment system that is also resilient to internet failure.
https://www.ecb.europa.eu/euro/digital_euro/html/index.en.ht...
Sounds like it's supposed to replace Payconiq (which is currently the biggest mobile payment service in Belgium).
The fragmentation of payment services is starting to annoy me. I can use cash or cards everywhere in the eurozone with 100% compatibility. But every handful of banks in every country has decided to create their own payment "solution". Typically using Android & iOS apps that require an insane number of permissions (including location and wifi connections!?).
Looks like wero is just more of the same. Another non-standard that's only supported by a handful banks in a handful of countries. And I'll bet it won't work on rooted android devices, and that there won't be a web version.
At least it's built on top of SEPA Instant Payments, which is a step forward...
But generally I agree it's not an ideal situation and I fully blame Apple for the current state of things - all QR-code based systems (payconiq, Bancontact, etc.) could've been avoided if apps could provide payments and access NFC from the start but here we are.
No it hasn't. The right cap is 0, like in Brazil. It doesn't make any sense to have 0% payment fees on cash and 0.2% on cards. Cash is easier to fake.
It also doesn't make any sense to be a percentage. It takes the same number of bits to transport the number 10000 as it does to transport the number 10.
Even 0.2% is essentially just a privatized tax.
I envision a third payment processor that isn't Visa or Mastercard and not even crypto.
It isn't Stripe or PayPal either, something completely different.
Thoughts?
Edit: oh, that's Visa Europe now...
Then, just last week, the US presidency launched an investigation considering Pix an unfair trade practice against the US.
Actions like that may show the current direction of the US government is aligned on preserving status quo. But still, I wonder how impactful a public digital infrastructure for the dollar would be.
The chargeback system (MED) is only so-so right now, but expected to get better.
There is a lot to like about Pix, but the spec is extremely complicated and hard to implement.
You don't have to give your credit card details and refunds go straight back to your account.
In fact, it really impressed me that Aliexpress got it working before many Brazilian sites.
Also, care to elaborate why you think the spec is complicated and hard to implement?
Pix and OpenFinance are extremely chatty APIs with a ton of rules. Being a merchant using the ecosystem is not that bad, but trying to be a participant in the network is complicated.
I think what worries the U.S. more is the likelihood of Pix spreading around the world. It’s such a great public program that I believe many countries will eventually adopt it, or adopt some version of it. In fact, AFAIK some places already have it, like Thailand and Malaysia.
Consumers like it because it is widely available and free, companies like it doubly so, and even governments like it because it helps to combat tax evasion and fraud.
Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants. But I believe even that will change in the future, to the benefit of Pix-like systems.
The transfer system is like that due to government regulation
It will not take long. Banks are already offering products with credit on top of the Pix. Furthermore, contactless Pix is now available in Android phones. If we look from the financial and usability aspects, Pix will continue eating the credit card market share.
I didn't know Thailand and Malaysia had similar systems, though. I hope the example spreads! Creating a competitive infrastructure and product is an interesting way to deal with monopolies.
India has UPI, China has Ali and Wechat pay. Almost everyone in these two countries can go weeks without having to use cash.
In South East Asia, Vietnam is leading QR payments. I live in Ha Noi, and I only carry VND equivalent of $15-20 with me, and it sits in the wallet for ages. Everything from gas stations to restaurants to street vendors to even paying taxes, you do it from a QR code. There is no wallet, the money is directly debited from the account.
Thailand, Singapore, and Indonesia have similar systems. In Indonesia, a couple of "super apps" had their own wallets, but merged with QRIS a few years back, a lot of Indonesian people can now pay with QR codes, even across wallets and bank accounts.
South America and Asia has already started to replace card payments with the QR payments. Rightfully so.
I am not sure it is a better proposition if one looks at staggering amounts of debt caused by credit cards
It's a much better system than the dystopian American one where prospective employers and renters check your score, which is built based on a ton of relatively private information, to determine if you're worthy of renting or working. And people have to game the system by minmaxing credit cards to be able to have the chance of renting or even working. It's utter nonsense that doesn't serve anyone other than the credit card companies and credit score bureaus.
Sure, if you overspend you get heavily penalized, and that's not great, but you don't have to spend a dime of interest to build a respectable credit score.
How does that work?
However after the fact there's less options, I've never gone through
The returns/refunds can be handled offline by a mutually agreed facilitator that does not have a monopoly on the payment system. You can also have a legal mandate that all internet purchase, for example, should employ such a service, that charges a market fee and is then liable for making fair decisions.
The case where you have a dispute with the merchant (i.e transaction is authorised but problem is 1 layer up - you feel that reality doesn't match up with the payment record!) is different. You paid as intended but the thing you wanted didn't happen. Right now things are bundled together.
Sometimes this is handled by marketplace (think amazon, vs paypal/ebay and their different balances of favouring merchant vs consumer) but overall (e.g. consider shopify who are basically uncontactable in case of merchant disputes) I don't think the whole payments system makes this very clear. In practice it is sort of a shifting balance between various parties.
There are actually big questions of who eats risk between consumer, platform, merchant and various payment processors for a given transaction and things are a bit obscured. In practice all the parties EXCEPT the consumer know what is really going on.
It could be made much more clear who has the responsibility for resolving merchant disputes and their records could be made public, and this could be a more explicit point of difference in payment / marketplace offerings.
I think lots of people would make different decisions about where and how they bought things if they could see statistics about how disputes are handled.
I am not arguing for any specific method of solving disputes or more government intervention in general, I just think that if things were more transparent (mandatory reporting) fewer people would feel ripped off, people could make more informed decisions, and marketplaces / processors who are adept at resolving disputes would be rewarded as they deserve. Basically, the market would work better.
Consumer protection deals with chargebacks after the payment was made and the products/services are not delivered to required standards. This gives enormous power to credit card companies against merchants and enables obscene rent extraction against consumers who don't require it, yet still pay 2-4% more on everything they buy, even with other payment methods.
What happens if a fraudulent charge happens?
What a lot of folks do is they pay for most purchases with UPI but try and ensure there is some kind of "undo" button somewhere for large purchases. If I am making a purchase on a shady website, or making a large purchase, I will pay using CC so that I can chargeback and the CC company will deal with it. However, even if I am buying a laptop or whatever on Amazon, I know that amazon will deal with returns and stuff properly, so I would just UPI it. There is also the matter of credit card offers and points and what not. If there is a good discount then CC is used.
This is the entire value proposition of credit cards and is what undergirds the issuer (bank) justification for interest rates assessed. To be able to defer card-holder immediate payment for some period of time and/or to put the onus of proof-of-purchase on the merchant instead of the card holder.
The last point is non-trivial when considering debit or debit-like networks result in funds being transferred during settlement (often performed daily), thus making the customer responsible for proving they did not perform the transaction post hoc.
Also Vietnam (Napas247), Singapore (PayNow), Philippines (QR Ph), Japan (lots different systems), China (WeChat/Alipay, I think?), Russia (SBP), Belarus (ERIP, in a sense), and the whole of EU (SEPA transfers).
One problem is, most of them don’t really work for you if you’re a foreigner. Moreta (YC S24) is doing something in SEA, and I’ve seen another service for visitors in India, but I think exchange rates wouldn’t be too good (compared to something like Wise, maybe on par with regular banks though).
https://moretapay.com/, https://ale.sh/r/moreta (affiliate link)
https://wise.com/, https://ale.sh/r/wise (affiliate link)
The closest EU equivalent would probably be the planned digital euro, but the banks are fighting tooth and nail to prevent that.
Though, most of the shares belong to major EU banks, yes.
(One of many generators you can try: https://qrcode.tec-it.com/en/SEPA)
Doesn’t seem to be supported too widely though :(
Rewards is another big one and the reason I personally prefer to use credit cards where possible.
Does Pix offer something like credit card rewards? I understand that you ultimately pay for this through fees that make prices slightly higher, but it is still an incentive to use credit cards over other payment methods.
No, because it's free, there is no high transaction fee to pay for those rewards. And that's ultimately better.
The US has its own version of this: government backed, 24/7 instant settlement payment rails (called FedNow). It released in 2023 but adoption is slow because it's not mandatory. Banks are especially slow to support "Requests for payments", which might compete with card networks for retail purchases.
It's the banks, not Visa / Mastercard, that make the most off credit card fees. Visa / Mastercard take .1-.2%, the bank takes ~2%.
The other unique bit about the US is we have uniquely strong consumer protection laws and a uniquely large amount of fraud. Irreversible payment rails are a nightmare for consumers who are used to chargebacks being built in to the payment rail, and banks are skeptical of exposing such rails to consumers because most of the time the banks are required to make good when the customer is defrauded.
I'd certainly dispute the former part. Strong, in a subset of cases. But chargebacks are still, ultimately, a he-said-she-said a lot of the time, and it's very easy to find abuses of it. Not to mention, merchants who blanket ban and revoke access to purchases because of even legitimate chargebacks. There's little recourse for that other than arbitration, generally, if that.
It's already being used for data cross referencing, tax collection and investigation purposes. There are plans to implement into these payment systems pretty much everything that cryptocurrency maximalists warned us about. It's a convenient system but at the same time quite dystopian.
https://www.pushkin.fm/podcasts/hot-money/episode-8-inside-p...
> The only thing stopping them is the sheer unpopularity of such an action.
This is the intended functioning of democracies I guess.
So.. when paying in a store, you need to open your banking app in your smartphone, and if you’re in an area with bad cellular connection (inside a few buildings or in a countryside), you need to connect to the store wifi. Only then you can scan the store QR code and make the payment.
So a single payment can easily take a few minutes, as opposed to a contactless card payment which takes a few seconds.
My main issue with pix is the even more reliance on a smartphone for our day to day life.
[0] https://www.contabilizei.com.br/contabilizei-responde/taxa-p...
Banks pay a small fee (less than a cent) per batch of transactions.
There’s no other place that protects its companies so fiercely, meritocracy be damned.
Great for investors though!
I fully expected Trump to attempt to leverage the Bolsonaro trial into economic advantage but it was pretty surprising to see him take issue with pix of all things.
Someone could lie about the nature of their transactions, but that's called tax fraud and it's already possible and we already have mechanisms to deal with that.
Yes. Also the current administration is hostile to public goods as a concept.
The politics around this is very weird. The US is basically regularizing "stablecoins" as electronic dollar-proxies while banning central bank digital currencies which the Fed has never planned to do. Basically to ensure all the profit and privacy risks stay in the private sector.
As for the government, I'm sorry, I thought I acknowledged that point. Though I also don't think we should just take it and give up.
I firmly believe that the Federal Agencies do not fight bitcoin exactly because it is so easily tracked.
The future digital dollar is being quietly sabotaged as the current administration realizes that crypto isn't just capable of anonymous bribery, it's the ideal medium for it.
> And other men may carry cards, as members of the Diners
that i did not understand until a few years ago someone mention the show, I remembered the line. And now at this moment, where this article reminded me of the Capital One acq. of Discover which happened to own Diner's, I can't help but think of this zombified credit card company limping along.
Sign me up for the Diner's platinum, which I have to assume will get 5x points at the five-and-dime.
We raised some money, built it, and demo’d it to dozens of different business. Instant clearing, way cheaper fees, bundle fraud insurance, digital proof of purchase. But it was an uphill battle- people didn’t want it.
Merchants might say they care about the fees, but in practice they care about conversion and getting sales. If you want them to act you need to promise to bring in new revenue, not reduce their cost of existing revenue.
Second problem is the rails. Your only option to debit is ACH, and ACH’s can be returned by the customer for any reason up to 60 days after the debit. Even with return-risk profiling, we had issues with Russian fraudsters using stolen SSNs to onboard as a merchant, do a “custom jewelry” sale for thousands, then as soon as the merchant gets paid out, ACH R10. The “merchant” has RTP’d that money away so when we try to debit it NSFs.
RfPs on FedNow (if they ever get widely adopted) would solve this, because at least they’re irreversible. Until then the only competitor is crypto, but good luck getting US consumers to use a different currency at checkout without tanking your conversion (people have tried!!)
The alternative to new competition (which would probably also raise its rates as soon as it became popular enough) is regulation on the fees, as seen in Europe. This makes some sense as the problem is less with the capabilities of the systems which exist today and more with the size of the fees of established players. I don't see the US going down this route any time soon though.
Most likely, in my mind, is the world (and maybe eventually the US) moves away from US based solutions in this space over the coming decades as other governments continue to consider this something to act on.
Regulation on interchange worked in Europe. The other option is government mandated support for bank transfer rails. That’s how UPI in India and Pix in Brazil took off- they were mandatory.
The US has FedNow, but it’s push only (not user facing, too high friction for checkout). RfPs are there but still low adoption.
To me the situation described sounds a lot like "I thought people cared about cheaper healthcare but when I offered them free clinic visits in Antartica nobody wanted to come. I guess they are just lying to themselves" - completely ignoring the reason for the rejection was the overlooked additional friction which actually raised total losses, not disinterest in lower cost itself. Offer a solution without the additional friction but with the improvement in the metric and I'm convinced you would find they are not lying to themselves about wanting to have more profit. Of course, the hard part here is creating such a solution would be extremely difficult (you'd have to onboard hundreds of millions of active users before you could pitch your solution to businesses, a bit of a paradox) - hence why MasterCard gets away with the rates and competition can not form (rather than confused merchants).
Crypto has value the way Gold or pawnable items do, and until that barrier has been crossed the people will never embrace crypto as an alternative to cash and credit.
Realistically the only way for that to happen would be if the US replaced their currency with a government backed crypto, but that is unlikely to happen without a coup.
Visa and MC could still offer lines of credit in such a system but they would not be the primary purveyors of capital motility and therefore their entire business model would collapse or require extensive restructuring.
Our thesis on crypto was that American consumers will never pivot to a foreign currency to do retail purchases. That’s just too much friction. It’s possible we get proven wrong, though
My immediate instinct upon reading this is "of course those businesses wouldn't be interested". They are selling a brand and image first, and if it looked like they wanted people to download some new app and put in their bank details to make a purchase instead of swiping a credit card it would cheapen the brand. Luxury stores are all about a streamlined experience and the appearance that money is no issue.
SMB business model just didn’t work, with tons of white glove customer support needed for a customer we’d make $20-$50/month in fees
With high ticket sellers the purchases are high intentionality enough that you can convert customers.
The fact that the second part of his comment is full of acronyms "we ASDFed the GHIJ over KLMN" suggest it's yet another case of a manager completely detached from reality of average consumer.
Confused about your hate of acronyms. The bank rails are a practical limitation on how effectively a startup can compete in this space. Do you feel the same hate when people use technical terms about coding eg “we deployed with Kubernetes on AWS”?
White labeling the payments infra as “their pay” did intrigue them, but not enough
The fee ends up split between the cardholder, bank, Visa/MC, maybe the card brand sponsor… everyone’s happy.
Luxury is struggling in 2025 and is losing to the resale market which is growing 3x faster. They’re especially struggling with gen z. Build a branded luxury-only payments network that owns the category “buy to resell”. Attach purchase metadata to pay-by-bank identity for digital proof of purchase.
You have to play it right (digital proof of purchase generates social media posts and a verified stamp, ie buying it to flex). But that way you can convert young customers from rewards cards AmEx etc without having to compete on rewards
I think QR payments can exist in the US if they do the same things that happen in asia: you charge via cash and the balance is stored with the provider. There aren’t any ACH transactions to reverse. If you allow charging with ACH you only cover a small amount and you control risk accordingly.
Cashapp pay is leading in this department, and since they own the POS terminal Square they’ve actually been able to implement QR payments in some SMBs. They get terrible adoption, though
Also highlighted by all the merchants jumping to support the “buy now, pay later” providers.
In payments, though, the code isn’t the hard part. The hard part is the licensing/regulation and most of all the risk analysis. You need a partnership with someone with an MTL to move money; you need anti money laundering policies and sanctions screenings and to do KYB checks. These days that’s not that hard because there’s vendors for all that, but it’ll cost you low five figures and you need to go through an enterprise sales deals that take a month or two.
Even with all of that, you’ll probably still lose tens of thousands to Russian fraudsters who present as a perfectly legitimate American business.
Payments is a tough business
[1] https://en.wikipedia.org/wiki/Unified_Payments_Interface
From 8 June 2022, RBI allowed the linking of RuPay credit cards with India's Unified Payments Interface (UPI). In the absence of a physical card, customers can use their credit limit through for transactions.
An action the payment companies took extrajudicially at the behest of the US government because the US gov was't happy with Wikileaks. Wikileaks' crime was that they'd been very successful at getting true information to the public about what governments were doing.
This was quite shocking to me (and at least some others, presumably) at the time, in 2011. I guess if we were taking it seriously, we would have been obliged to say: oh, how fundamentally authoritarian and anti-democratic.
When progressives/democrat/left types shout "fascism!" now on account of something Trump did or said, the cynical part of me says that a lot of them probably just want Obama/Clinton/Biden-flavoured authoritarianism rather than "ugly" lower-middle-class Trumpian authoritarianism.
The current flavor of authoritarianism is quite bad, though, and does distastefully wear its hypocrisy on its sleeves.
I ask sincerely here. That would be a centre which would be ten miles left of where the centre seems to be, from where I'm sitting. Curious to know how you view the political spectrum to arrive at this framework.
For example, Macron might be a good example. How would you classify his politics, based on the above framing?
They're both fundamentally anti-democratic, is what I meant. In both cases, the political / business class controlling the state is utilising private and public institutions to further their aims, with little to no care for law, morality, or even common decency.
Big businesses only pay 0.0475% + ~0.003 USD per transaction for BankAxept: https://bankaxept.no/hjelp/priser-for-bankaxept
8/10 card transactions in Norway are BankAxept. I think many other countries have similar solutions, and if not they should implement them. It won't end the duopoly, but it does decrease the consequences.
One consequence of the flat fee is that at some retail stores, if you pay by debit, you can ask for "cash back". For example, if you buy $20 of groceries and ask for $100 cash back, the cashier will charge $120 to your debit card, you will have fully paid for your groceries, and the cashier will give you $100 in paper money as if he were an ATM.
Obviously, "cash back" is a terrible idea if the merchant allowed the customer to pay by credit card.
[1] https://organiser.org/2025/07/22/304055/bharat/a-fintech-rev...
The reason the credit card monopolies exist is they work globally.
It’s also available in many global markets like SEA, GCC and others.
So India is becoming the world leader in digital payments!
Fair warning (pc, please know that I am not targeting you) about the URL pc has shared - it’s literally the mouthpiece of India’s ultra right mothership org (it’s literally called that - mother org - RSS) which is affiliated with BJP (in fact practically BJP, the authoritarian ruling party, is a branch/child of this org). And they are known for omitting and distorting history and context.
Here you go - some alt sources -
https://en.wikipedia.org/wiki/Unified_Payments_Interface
But UPI is a product - real deal comes from here https://en.m.wikipedia.org/wiki/National_Payments_Corporatio...
These sources and alt sources also will highlight the history and thinking behind all this.
Like or dislike this Govt (tbh: I clearly fall in latter bracket) but I think payments is one arena (among many) where India is going really great and there many great things lined up. Luckily India is in a position right now to deliver a loud and unequivocal “F— You” to efforts from entities like MC/Visa when they try to assert their “birthright” of monopolising the world.
Why do you people think you and your opinions are better than majority?
https://thediplomat.com/2025/04/modis-india-is-a-dangerous-p...
https://theprint.in/opinion/authoritarian-streak-among-india...
https://www.lemonde.fr/en/international/article/2024/07/04/m...
https://www.sciencedirect.com/science/article/abs/pii/S00167...
This isn’t a fringe view or “disgusting”
The Diplomat and ThePrint are infamous for fake news and skewed stories, and for anti-India Hinduphobic content.
I guess you found it hard to find any pro-India site to link on a sub-topic about India's most popular payments system?
And oh by the way, you should search for UPI on those sites you linked. They praise it too!
It is poor manners to deride the visionary leaders of modern India as "authoritarian" when they ensured India remains world's biggest & most vibrant democracy and swiftly scaled the nation to a $5Trillion economy! That's why Modi has been democratically elected as PM for third time in a row!
Now back to the main topic at hand..
First and foremost, UPI is India's most popular real-time unified payments system and it is completely dominating the digital payments scene in India, because it is instantaneous, free for consumers (marginal fees applicable only for high value transactions, and where Interchange conversion is involved). UPI is so good and versatile, that its managing organisation NCPI is able to license the technology stack to other nations, who are then able to promptly launch their own branding of this versatile and powerful digital payments system.
Secondly, sheer scale of UPI is mind-boggling indeed.
In June 2025, UPI (Unified Payments Interface) recorded 18.39 billion transactions, with a transaction value of ₹24.03 lakh crore. The daily average for June 2025 was 613 million transactions and ₹80,131 crore. UPI has shown strong year-on-year growth of 32% in volume and 20% in value compared to June 2024.
Thanks to UPI, the payments situation has changed so drastically in India, that most banks are accounting for 85%+ payment transactions volumes through UPI itself!
Even the poorest people in India are using UPI ubiquitously and safely, it is that trustworthy, instantaneous and seamlessly easy to use.
No wonder Visa, MasterCard, and their ilk are terrified and desperate in India. Their vicious stranglehold has been broken, and how!
You (all; I see couple of fledgling hners) just proved me correct in a way :/
> the world's most awarded and most popular Premier (PM Modi) and the most hard working political party (BJP) India has ever got
You forget to mention "Most UNESCO certified Best PM".
> It is poor manners to deride the visionary leaders of modern India as "authoritarian"
Hawww. You make me sad. I am sad now. Sorry?
But please answer me first - why are you addressing Him as just "Modi"? Wouldn't it be "Hon'ble Modi Ji" or at the least something like "Respected Modi Ji". You bad!
> Their vicious stranglehold has been broken, and how!
Hail!!!!! Hail!!!!
You're exaggerating for effect. GDP is the total value of all goods and services sold or bought; only a fraction of which is paid for with a credit card. I doubt an F35 is purchased with a Visa.
Fixed.
V/M would love to "but fraud" us sadly the actual payment fraud % is much lower than claimed and easily dealt with by the issuing/receiving banks.
So stringent in fact, that RBI shut down PayTM Payments Bank which was most popular market leader in that sector, because PayTM flouted the mandated norms for digital payments and payments banking.
That is also beside the fact that UPI platform has high uptime and rarely faces any outages.
I only have debit card, no credit card at all, in many places AUD$0.30-$0.50c is added to the goods price on debit cards. With cash, many places are offering 5-15% off when buying with cash only which is awesome.
If you are a gamer, you most have heard within the last 3-4 days now that Steam, Itch.io and others removed +18 games from their store because of a psycho Australian activists group called Collective Shout, who used words like rpe, child prngrphy forcing Visa, MasterCard, PayPal and a Japanese payment system to force those games stores to remove the games or they wouldn't have a processing payment.
Thanks to Visa/MasterCard monopoly, everybody was forced to do it. Many players don't even have +18 games filter enabled, for us in general this isn't about the +18 games but about US payment systems telling us what we can buy or not. Visa is getting its ass busted in Japan already with a Japanese politician joining the fight with gamers.
Dedollarisation has never been this strong, countries are already doing international trades using their own currency over the US dollar. I am not even getting into BRICS.
It is not a surprise that the US isn't happy with PIX in Brazil, it is a huge country, imagine all the money Visa/MasterCard are no longer making. Based on market data, it suggest an ESTIMATE around USD2.5-USD4B in 2024-2025 revenue lost lmao
The US is encountering the perfect storm!
Interesting that debit cards are twice the swipes that credit cards are. Didn't know that. I wore the debit card hair shirt for decades. They have a ~0.73% transaction cost vs 1.5% to 3.5% for credit card swipes. But I never once got any benefit from this lower transaction cost.
So now I have the Trifecta and a Savor. I work my credit cards aggressively and use their benefits to exceed their annual fees before even accounting for 3% cash back and Membership Reward Points and signup bonuses.
I am winning on this. Consequently someone else must be losing. It seems to me that the debit card users are subsidizing me.
I don’t know what your system is, but it sounds like you enjoy it, so you do you.
And yes. Cash and debit cards have always subsidized credit.
My system, so to speak, is really nothing. Sign up bonuses, (American Express wanted me bad), read the fine print and work the benefits, use the right card for the given transaction.
Does this make sense? No, it does not. Yet here we are. I've always detested this stuff yet merchants are forcing me to take this benefit. So I take it.
FWIW, 99% of my transactions are with my phone. So there is no flex involved. My iPhone makes the transaction virtually the same as with a debit card.
If you're going to buy groceries, does it matter if you pay cash (debit) or use a credit card? The credit card gives you some percentage of that purchase back in rewards, which you then redeem on other things such as airfare, hotels, dinner out, uber, etc.
Think of it like a coupon that's valid everywhere, and every time you use it, a tiny sum is deposited into a savings account.
Pay it off at the end of the month and it's pretty much free money. Credit cards also have better cardholder protections, security and safety than using debit cards or cash.
Some people use credit cards for every purchase and become highly skilled at maximizing card rewards. This is also why many will say card fees don't matter - you often accrue enough rewards to pay for the fee itself plus lots more, making the fee irrelevant. The fee is there to compel you to use the card often enough to exceed the fee's value.
This network is sustainable and running on established blockchains which have been running for over a decade now - ETH.
This network somehow needs to penetrate domestically too - something like a UPI. That moment is going to be a watershed moment that should break this duopoly.
PS: Its a separate matter altogether that Visa/Mastercard are trying to gel well into this new age infrastructure
Huh? I think the message format in ISO20022 can only 3 intermediaries before having to resort to more complex mechanisms. Most SWIFT payments have 0 or 1 intermediaries.
I guess you could consider SWIFT to be an intermediary instead of a delivery mechanism? But even that doesn't add up to 6+.
The government aimed to offer zero-cost bank accounts to extremely low-income citizens and needed zero cost debit cards to make them functional. Rumor has it they asked Visa and Mastercard to waive fees and both declined. Even Indian banks reportedly pushed back.
So India doubled down on RuPay, its domestic card network. What started as a fallback turned into a fintech revolution. Over 559 million bank accounts were opened under this mission, most powered by RuPay.
Ironically, if Visa or Mastercard had agreed, RuPay might never have taken off.
Despite all of the issues that are within the crypto world, I do think stablecoins are a fantastic use-case that most of us should be able to get behind to break this duopoly. With some oversight/proofs of solvency for the issuers, I hope they can become the dominant payment method. I can say from experience, the fact that I can easily pay friends and also receive yield on my holdings is such a nice experience, especially considering the inflationary environment we're in currently.
KYC should be made easier for teens and also I must admit, from what I see, remittances/cross country payments are just so much of an hassle but crypto sucks as a currency too in many aspects mainly on how to convert crypto <-> cash non kyc way
This is far from atypical! If you're interested in the prevalence and impact of market consolidation, Matt Stoller talks about it a lot in his BIG newsletter: https://www.thebignewsletter.com/
gchamonlive•1d ago