I think for a new payment system to catch on it needs to either have a significant benefit for both payers and merchants, or be pushed by government policy (for example, require all merchants that meet some criteria to accept the new form of payment).
I agree that both parties need a reason to adopt a new payment method... But the reason can't be only that there's a lot of merchants/customers that have it ... If there's benefits for enough participants, reach can drive adoption for those who don't care about the benefits, but you've got to have some material benefits to get people started.
It's got to have a good experience, too.
But from this rant, it seems like they were trying to be a middle man for instant bank payments... I don't see the value of that as a purchaser when I can use a debit card. For the merchant, running a debit card takes a small fee, but anything that needs someone to scan a QR code takes a lot of time.
I’m pretty sure the main reason Apple/Google/Microsoft haven’t done this already is because they would be directly competing with the US government. The idea must get shut down pretty quickly by powerful people.
There’s no larger conspiracy here. It’s that payments is a commodity now, with shrinking margins and high competition. It’s not worth it for most players to even enter the space, let alone compete tooth and nail for a shrinking share of the pie.
Apple/Google/Amazon/Microsoft could save billions on credit card processing fees by cutting out Visa/Mastercard -- but instead are pressured to accept "special rates" and warned to stay out of the business.
Surely you must be thinking of mob movies, not the payments space.
There's no way that I can take such strange goings-ons at face value - Apple only gains by disintermediating Visa and they clearly tried at some point, but something stopped them. What stopped them? Too hard for Apple? They already built the infrastructure for it with Apple Pay and Apple Cash. What stopped them from going all the way? I'm convinced something more powerful stopped them.
See here: https://www.reuters.com/legal/transactional/apple-visa-maste...
Even in the OP article about Zenobia Pay, the founders clearly stated they were not "well connected" enough to make a payment network. This suggests a mob. You shouldn't need to be "well connected" to launch a genuinely better product in a free market.
The premise is that credit cards (visa / Mastercard) is broken. When actually it works really well.
For starters it works everywhere. Online. IRL. In my home country, in foreign lands.
Secondly it costs the consumer nothing. The cost goes to the merchant. If anything the customer gets rewards.
Merchants might pay 3%, (and ultimately yes, that's in the price of goods) but checkout "just works". They're in the "get paid" business, not the "teach customer new system" business. They'll accept new payment options (which the POS) just provides. But they don't drive the market.
Fixing Visa doesn't work because the people that matter don't think it's broken.
Just like tariffs, right?
Visa/MC is a +1% income tax on most of the economy.
That's legal. https://www.federalreserve.gov/faqs/currency_12772.htm
Legal tender applies only to debt/creditor relationships.
> Legal tender is a form of money that courts of law are required to recognize as satisfactory payment in court for any monetary debt.
A country may separately require businesses to accept legal tender, if they feel like it.
https://en.wikipedia.org/wiki/Legal_tender#Status_by_country would appear to indicate this distinction is very common in the developed world.
Having to buy a register / point of sale which can handle it
Hoping you employees don’t pocket a few bills here and there
Hoping you don’t get robbed
And this whole network has now been built in such a way that now even debit costs the same charge just as network fees
Open sourcing this might be a step in good faith and I mean, we have UPI where I live and it has 0 fees and trust me its crazy good. I personally wish that either everybody in the world could use UPI or pixis from brazil.
Provide me an article or some proof to this fact for me to comment further as currently we are at an disagreement on this thing which I hope we can turn into meaningful discussion.
https://www.theguardian.com/money/2025/mar/16/uk-high-street...
https://www.dnb.nl/en/general-news/news-2023/some-retail-sec...
https://www.bbc.com/news/articles/c20gevkx8gyo
https://www.aarp.org/money/personal-finance/no-cash-accepted...
https://educaloi.qc.ca/en/legal-news/do-you-have-the-right-t...
https://www.riksbank.se/en-gb/payments--cash/payments-in-swe...
and that is when UPI is almost ubiquitous, I can't imagine a shop saying cards only. I think it might be illegal where I live.
this is not true as it is not what "legal tender" means. Legal tender is something that the government must accept as payment, not private enterprise.
> Businesses don’t have to accept cash.[0]
> There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services.[1]
[0]: https://www.accc.gov.au/consumers/buying-products-and-servic...
* Cash Payment Method Will No Longer Be Accepted A Notice by the Patent and Trademark Office on 10/03/2017*
https://www.federalregister.gov/documents/2017/10/03/2017-21...
It’s true that private businesses can set pretty much any payment terms they want for a transaction that hasn’t yet taken place. But the moment you move to a situation where you owe money, they do have to accept cash.
I think it's close to impossible to "fix" Visa without government intervention (e.g. limit fees to a fraction of a percent), but I'm still grateful to anyone who tries.
This is what Australia is looking at currently: https://www.abc.net.au/news/2025-07-15/rba-credit-debit-merc...
I guess the issuers all have complex models that take these things into account. In any case, I think it's a good move.
Visa/Mastercard/BNPL/Klarna etc. all have negotiated discounts for consumers, paid for by the merchant.
I'm skeptical that merchants would lower prices (stepping away from $x.98, etc) instead of pocketing the higher margins themselves.
I haven't used cash in my home country for the last two decades, at least. I mean, CC works even on parking meters when paying half a dollar (equivalent) for a few minutes of parking, and I can use a card in flea markets and even some garage sales.
Oh, I forgot: A lot of shops, restaurants, and other establishments have stopped accepting cash, even if it's illegal to do so (legal tender etc). That's because handling cash costs them MORE than handling credit/debit cards. In other words: It appears that using cards LOWER the costs for the merchant, not the other way around.
EditAdd: I presume a lot of the cost saving is that paying by card is 100% electronic, just tap the card (add the pin code if it's expensive enough), and the transaction goes directly into the shop's account. With cash it's way more cumbersome. Way, way more.
(Mind, there's no such thing as signing by hand anymore. If there were paperworks involved it would be different. But there aren't any, not in Europe and not in Japan anymore either)
No. This is a misunderstanding of legal tender.
https://www.federalreserve.gov/faqs/currency_12772.htm
"There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise."
Legal tender only applies to debts. When you go to buy a t-shirt at Target or a burger at McDonalds, you don't owe a debt, and they aren't a creditor.
I used to think that was true, but try paying parking fines, etc. with pennies. Legal tender has never been challenged in court to my knowledge
It was challenged and upheld, both as against debts before the the legal tender acts were passed and those after, by the Supreme Court in Knox v. Lee (1871).
https://www.federalregister.gov/documents/2017/10/03/2017-21...
(And because government can exempt itself from virtually anything not forbidden by the Constitution. This is why cops can break down your door, but I can't.)
https://www.findlaw.com/legalblogs/seventh-circuit/city-sanc...
> The Seventh Circuit Court of Appeals ruled this week that city-levied fines are not debts under the FDCPA... District courts, for what it's worth, uniformly agree that a fine does not stem from a consensual transaction, and thus is not a debt under the FDCPA.
I wonder if the same thing will happen with BNPL (Klarna, Afterpay). These are higher fee than credit cards (5-7%) because they bring in new customers. But, like with credit cards, savvy customers are starting to see BNPL as interest free loans (aka free money on the float, even better than credit card rewards), and it's possible that they become the new consumer results. Merchants are left holding the bag of paying 6% processing fees for everyone, even people who can afford it.
Sellers increase the price by the fee amount, savvy consumers with rewards cards can get back around 80% of that price increase, and regular non-credit-card-with-rewards holding consumers just subsidize the whole thing by paying the extra. It's a tax on people without rewards cards.
https://www.ftc.gov/business-guidance/resources/new-rules-el...
* Mastercard and Visa don't allow debit card surcharges, even if the transaction is run as "credit".
* American Express only allows surcharges if they also apply to all other forms of card payment. This includes debit cards, which interacts problematically with the previous rule; if you want to do a card surcharge while accepting all three card brands and remaining compliant with all their rules, you have to apply it only to Mastercard and Visa and not American Express, even though American Express is the most expensive.
* Several states still don't allow card surcharges, and others don't allow merchants to profit from surcharging (which makes it hard to advertise a uniform surcharge) or have regulations about how prices have to be listed if a surcharge is going to apply.
Rules like these don't make it impossible to do surcharges while remaining compliant, but they make it significantly harder than it'd otherwise be. I think this is the primary reason why most merchants still don't do them. (Well, that and that their competitors don't, but that could explain either equilibrium.)
Target, one of the largest retailers, offers a 5% discount for debit. Comcast, Tmobile, Verizon, ATT, Lumen, utilities, governments, and insurance companies also routinely charge extra for credit cards (or discounts for debit/cash).
Daycares charge more for credit card, as do doctors’ offices.
At least half the gas stations I see have long had higher credit cards prices.
Not to mention contractors for physical labor.
The change since 15 years ago is stark. If I wasn’t getting a minimum of 3.5% cash back on my purchases, I would use credit cards a lot less.
So it doesn't mean they increase the price of every product by 3%. One guy might charge more just for coffee, another do some other thing. But any extra cost you put on a seller of anything, the rational seller will make that back in sales somehow.
If the cost is only being paid by one vendor then that vendor can't raise prices or else customers would patronize one that had lower costs and passed on the savings. But if every vendor has to pay 3% then prices are going up 3%, because then the competition has no cost advantage they can pass on and people only stay in business if they're making enough to justify not doing something else. (3% is more than the entire net margin in many industries.)
In fact, the low end of cash handling costs for a business will almost always be higher than the card fees alone, but of course there are other costs in managing card payments too, so it's not quite that clear cut.
Cash is king for hiding transactions and avoiding taxes. If that's the situation then I won't say you don't deserve a cut, but for rules-following merchants taking cash isn't any cheaper than paying the credit card fees.
That’s not true at all, particularly for large purchases.
If I go to an electronics and check out with $5000 in electronics, there’s no way that handling cash incurs the same expense to the store as the 3% fee ($150).
Maybe for nickel and dime purchases, but that’s rarely the case.
Even a $50 dinner doesn’t cost the restaurant $1.50 (plus the $0.30 transaction fee) just to handle cash.
A store that sells $5k electronics is gonna lose a lot of sales if they attempt to save that $150 by only taking cash.
Canada has lots of stores that offer a discount if you pay cash. Many have a minimum purchase amount for credit cards.
If you take cash it means you have to hold it on site. To be insured you have to demonstrate secure handling for the insurer, which would include security systems and limiting the amount in the safe and register. Which means routine trips to the bank, which also incurs costs.
Like...that could all be true, but the rate merchants tried to ditch ever handling physical money rather suggests the fees were worth it (not to mention all the risk mitigation doesn't cover the increased danger to ones personal safety - walking $5000 to the bank is no fun at all).
I think the assumption is they declare only a portion of their cash receipts.
It's typical to estimate the cost of handling cash anywhere from 4% to as high as 15% depending on takings and size of transactions.
Smaller family-owned businesses will just take cash to the bank - but it's super common for somebody to eventually surveil them long enough to rob them one day as they're transporting the cash to the bank.
It's pricey to handle cash!
Ran a micro business in UK for 15 years, cash cost as much to deposit as card did - employee time (counting, reconciling, making deposit) and bank charges for cash deposits. It also slowed down transaction time (which was almost all IRL).
E.g. they might not include staff time and incidental costs around cash transactions that aren't obvious because they're not linked to the individual transactions, such as reconciliation, time spent transporting the cash, costs of depositing the cash, insurance to cover storage of cash.
Also consider that it takes very little theft to tilt the balance, and even a tiny amount of theft by cashiers not putting through all cash transactions can make a big difference.
In reality, there is no competition in the payment systems. Free markets mean competition.
Cash, credit (discover is dieing, but amex/mc/visa compete a bit), debit (several networks and all US cards have to be on at least two), I've seen PayPal as an option ocassionally, some merchants take Zelle, FedNow could if a good UX comes around (I don't think many merchants want to give out their routing and account numbers, and it's tedious to input them into my banking app anyway). Some vendors take checks and deposit them later, some take checks and process them immediately, etc.
People respond to incentives though. If merchants charge the same regardless of payment method, I'm going to use a rewards card that costs them more. When they add a line item credit charge, I'll consider cash or debit.
Only if Visa/MC agree with the item being sold though.
Be careful to not get hobbies that some religious pressure group hates. Today sex, maybe tomorrow rock climbing or fixing your own motorcycle.
Haha, if only that were true. I’d say roughly 20% of my purchases are rejected because of a badly tuned fraud algorithm somewhere.
Clearly, at least some merchants are price-sensitive and would be interested in a lower-fee alternative to Visa/MC.
Let's flip the script. In reality the averaged transaction _cost_ is probably O(0.1%) or lower. Why are we paying more?
EU has actually solved this with interchange fees for consumers being 0.3% which to me sound reasonably close to that 0.1%.
Ultimately customer pays for everything. Credit card companies just prevent merchants from revealing the costs of using credit cards to customers. Which should be illegal.
> Fixing Visa doesn't work because the people that matter don't think it's broken.
People don't know it's broken because regulator doesn't do their job and lets credit companies police merchants.
I can assure you in Australia, this is -clearly- not true, vendors pass the cost on to the consumer. I can probably choose a random store and prove this.
> The cost goes to the merchant.
And who do you think would pay the merchants costs in this case ?
That aside, I only use lightning with my Bitcoin-friends to settle stuff for fun. I live in a city of 300k people, and there are 3 restaurants that accept Lightning payments. Right now it is in its infancy, but I see Lightning as the only solution to actually enable web micro-payments (which failed as a standard because no credit card can provide .10 to .20 cent payments due to high fees)
As a shopper, if I know that a SMB is saving 1% or even 2% on merchant fees, I would gladly choose that option, even if I miss out on rewards for that purchase.
5x higher than they would be allowed to charge in the EU.
> accept pay-by-bank
I am reminded of tech bros inventing the bus in 2025
so this is a farewell post disguised as open source announcement?
Visa and Mastercard’s pre-tax income margins for the quarter ending on 30 June were 62% and 57% respectively [1][2]. That is $10bn a quarter in absent competition.
[1] https://finance.yahoo.com/quote/V/financials/ $6.33 on 10.2bn
[2] https://finance.yahoo.com/quote/MA/financials/ 4.67 on 8.13bn
Frankly, I find this admirable and want to encourage these kinds of things. Guys gave it a shot, failed, and are putting their work out there. They are communicating why they think they failed and what they think would help someone pick up the mantel. What did you all want? Them to just die in quiet and all that code disappear? Hell, their READMEs have more documentation than most of the open source projects out there.
What happened to that hacker mentality? That belief in an open source world, even if as just a pipe dream. To me it looks like they still care about their dream but realized they can't make it happen. They aren't asking for investment and their website says they are inactive, so what makes this advertising? FFS do we have to assume everything is done in bad faith? You don't advertise by giving your competition a leg up. If this gets them investment, who cares, the result is the same. Code and information is out there, you can't take that back. Honestly, I don't care even if the code was garbage (I don't know if it is or isn't), I'll respect anyone that releases their code instead of letting it die with the business. It's just a better outcome, so why are you all complaining?
https://github.com/zenobia-pay/core/blob/6b79cc494d3f14e4ddf...
QR code payments are particularly hard in countries like US and UK as you're trying to change consumer behaviour. I tried doing this in 2014 and again in 2019 - both failed to gain traction (aside from during COVID).
In the UK it's possible to accept card payments for 0% via Lopay, but only if you spend your earnings on our card (essentially, passing the fees onto the merchant/supplier you're paying). We're launching the same proposition in the US soon too.
If you don't use our card, our headline rate is 0.79%.
We're a lean team of just 36, supporting over 40k weekly transacting businesses with £1B+ in card processing. If anyone reading this is interested in this space, we're hiring and on the look out for driven people to join us!
But no tap to pay would for me have been one of the greatest downsides with graphene os.
I'd only prefer to have NFC over QR for in-store payment, and I transact way less money per month in-store.
And there was always the fear that your phone dies and you can't take the subway or purchase everything. It doesn't happen often but on some long days you really don't really want to be tracking the battery of your phone super closely.
NFC payments can work offline (although this is pretty rare) and can be authorized from a small plastic card that has no battery, no internet connection and is pretty robust including being completely waterproof. Plus 100% of the time I tap my card or phone on the merchant's terminal. No alternate UX option. Plus if you are using your phone for payments (which is a very convenient option) you don't need to open any app beforehand (WeChat is like 3 taps to get to scanner or code) and I found quick NFC reading to be more reliable than scanning a QR code where the lighting conditions and state of the QR code are not always perfect (it was almost always possible to get it to work within a handful of seconds, but often took a bit of fiddling around. NFC is reliably just tap and it works).
I still keep a few large bills in my wallet in case the card networks are down, flag my transactions or whatever else. But having this immutable payment card that is incredibly reliable and easy to use is way better than the phone-based QR systems I have seen.
What I would love to see if we bring phones into the system is a way of approving the transaction (including the amount) on your device. So for example 1. Tap phone 2. Review amount on screen and approve 3. Tap to commit payment. This is more steps but is far safer. That being said the number of times this has been an issue for me is 0, so it is probably better to just rely on the banking system to correct any mistakes rather than add extra steps to the payment flow.
China’s implementation could be done a lot better. There’s no fundamental need for multiple incompatible systems like they have. But even improved, it wouldn’t be as good as NFC.
in Asia, using QR Code to pay anything in very common in here
EU & UK cap it at 0.3% (0.2% for debit cards), and the rest of the world are closer to EU than US fees, if I understand correctly.
The power of the free market.
suggests that was not the GP's point.
American Express leverages the fact that most consumers don’t care what the merchant is charged
The clause that doesn't allow passing fees on the customer is the only thing that makes market non-free.
I think it would be only fair if people paying with a card were charged more. They get the cash back from the bank anyway.
Also I know that there are super-discounted stores in my country that do not accept cards for this reason.
This changed a while back.
"merchants are fee-insensitive, while consumers are rewards-sensitive. In other words, consumers pick credit cards (and, indirectly, networks) based on the goodies they receive, and stores will grudgingly tolerate high fees in order to accept credit cards."
But it’s not like there was some shadowy Visa conspiracy. We received pre seed investment from institutional investors and built a pay-by-bank network entirely fine without anybody stopping us
soared•10h ago
Digital wallets did somehow over come this, and those would be a super challenging but potentially valid approach #4. If Zenobia is in Apple Pay, google pay, link, etc it’s natural and easy for customers, saves money for merchants, and disrupts visa/etc without disrupting anything else (ie making people us QR codes).
Tough problem. You need a Jony Ive on your team to help solve it.
Or do like pix and give everyone $1500, but only if they use Zenobia :)
lelanthran•7h ago
I don't think so. A Jony Ive will not be in a position to solve the actual problem - what use is a non-universal payment mechanism to consumers and to retailers?
I read the linked page and don't see answers to the main adoption problem: how is the purchaser supposed to pay?
1. Purchaser has to download the app? Okay, but purchaser already has a few equivalents on their phone (Pix, etc) - added friction!
2. How does the App get money to make payment? Purchaser has to fund a new account? Okay, but that is more friction!
3. How does merchant accept the payment? Do they need a new payment terminal? Must their payment terminal be updated with new software? Even more friction!
I've worked in the EMV space, even quite recently, and merchants do not want to update and will only do so when forced to. Any new payment system (QR codes, etc) needs around 5 years (maybe more) before it is universally accepted.
The best way, where I am, to rollout a new payment terminal is to pitch it to the banks, who then offer it to the merchants who have accounts with them.
Adding new functionality to EMV terminals is a lot easier these days, since most of the new terminals are Android, and the vendors have app stores for third parties to write software for these terminals (Pax has Maxstore, etc).
Now, maybe I missed it, but I did not see this application on Maxstore, or some of the other stores. I could have missed it, because these stores have literally thousands of payment applications.
The long and short of it is, you came up with a non-universal payment method, and predictably it did not take off.
quesomaster9000•6h ago
If you want to do account-to-account payments you can show the customer the account/routing number, amount & invoice ID - but obviously that's high friction and the customer needs to login to their account and send a payment with lots of manual data entry.
Making yet another app, adding a financial intermediary, requiring you to link your bank account - these aren't solving the friction points.
We already have bank apps, when I scan a QR code in an industry-wide format it should ask me or confirm which bank app to open and pre-fill all the payment information.
So from my perspective, the problem is that FedNow in the US, and Open Banking in the UK - they could have just dictated "Banks must support EPC QR, or EMV QR code scanning and deep-links", and QR code payments would happen very quickly - even with NFC/RFID you can do passive scanning to achieve the same thing.
* Choose Account * Confirm details * Press send
That's about as easy as you can get for push payments, with a real industry-wide standard for communicating payment intents via NFC/QR. But both FedNow and UK OpenBanking are structured in a way which requires friction, and onerous regulation, through their clunky APIs - meaning you can't actually solve that problem on your own.
myflash13•4h ago
lelanthran•4h ago
ttoinou•6h ago
closewith•6h ago
ttoinou•6h ago
closewith•6h ago
myflash13•4h ago
closewith•4h ago
This further reinforces that it's a government that's maintaining the Visa/Mastercard duopoly and it will be governments that break it.
gabll•4h ago
[0] https://www.ecb.europa.eu/euro/digital_euro/html/index.en.ht...
Xss3•6h ago
lan321•2h ago
Nursie•5h ago
I'm adjacent to it in that we provide some of the infrastructure around identity etc in Brazil, and it seems to be really popular. I think there's a similar system in India.
In the UK you can do payments via Open Banking. I'm not sure how popular it is, but I've used it a few times to send money to Wise to then send over to Australia.