MasterCard Rails Against Bitcoin's (Semi-)Anonymity

angry tapir writes: MasterCard has used a submission (PDF) to an Australian Senate inquiry to argue for financial regulators to move against the pseudonymity of digital currencies such as Bitcoin. "Any regulation adopted in Australia should address the anonymity that digital currency provides to each party in a transaction," the company's told the inquiry into digital currencies. MasterCard believes that "all participants in the payments system that provide similar services to consumers should be regulated in the same way to achieve a level playing field for all."

Comments

Decentralization, do you speak it?

[Megane]

They should go after Bitcoin Inc. and force them to comply, amirite?

Re: Decentralization, do you speak it?

[Anonymous Coward]

No. Go fuck yourself

Re:Decentralization, do you speak it?

[Anonymous Coward]

No, you are wrong.

Bitcoin is already mostly decentralized, and Bitcoin 2.0 will be completely decentralized with no outside dependencies at all. Mastercard just wants to maintain their Bankster monopoly.

Sorry about their luck, but it's already been decided that most of us in Cyberspace are not going to allow banks to get control of this currency, and we are not going to comply with any regulations regarding it.

Re:Decentralization, do you speak it?

[mcelrath]

The non-anonymity of MC transactions is a huge liability. Not only does my MC payment for my coffee allow me to pay for my coffee, but it also allows the merchant to perform future transactions (whether valid or not). It's an authorization not a one-time transaction. This price is just too high and is the source of all CC fraud. There is no reason why any merchant needs to know who I am. If customers choose to disclose their identity to sign up for their email spam, that's their problem, but I should not have to pony up my identity to perform most consumer transactions. The only reason merchants check ID's on transactions is as a flawed fraud protection measure. It protects them, but at my expense.

Anonymous transactions are be better.

Re:Decentralization, do you speak it?

[Anonymous Coward]

it's already been decided that most of us in Cyberspace are not going to allow banks to get control of this currency, and we are not going to comply with any regulations regarding it.

I eagerly await Mt Gox 2.0, and all the bitching and moaning from people who thought that what you just described was a good thing.

Re:Decentralization, do you speak it?

[Anonymous Coward]

That's not entirely true. CC processors often can and do detect multiple attempts at a transaction and then deny subsequent repeat transactions. It also does not guarantee payment, it merely sets aside the money as "used". The merchant doesn't get the cash until they submit their required paperwork (sometimes taking a week or more). It also gives me time to review and dispute any such charges. Also bear in mind that I can charge-back invalid transactions and am not liable for fraudulent transactions.

In bitcoin-land I can send you the transaction and you never truly have to give me what I'm paying for. Sure I could use an escrow, but then it's on me as the buyer to try and find a reputable one that just doesn't decide to screw me over. And since everything can be pretty darn anonymous chances are you couldn't find the fraudulent seller if you wanted. So, no, anonymous transactions aren't really "better" unless you're overly paranoid or doing something illegal. In fact they can be a hindrance if you get screwed in a deal.

Re:Decentralization, do you speak it?

[Anonymous Coward]

You are conflating two issues, MC has non-anonymous payment as well as a system where your identity is your payment method.

BTC has a semi-anonymous payment system where your identity is used to verify transaction validity.

You could easily have a non-anonymous method of payment where your identity is used to verify transaction validity, BTC would have this if the owner of all wallets was made public knowledge (as opposed to only known to those that can run cross-references efficiently).

Re:Decentralization, do you speak it?

[AK Marc]

Nope. You authorize that one and only one transaction. This has been tested in court with the car rental places that have you sign and authorize a final bill, then charge you later (without specific authorization) for parking tickets or speed cam tickets sent to them later.

If you didn't authorize that transaction, it's fraud. If Starbucks uses your card info later, they committed fraud. And you, as a cardholder, is 100% "safe" from those charges.

The only reason merchants check ID's on transactions is as a flawed fraud protection measure.

That's a violation of the merchant agreement for all merchant agreements I've read. When you only deal with merchants acting illegally, you get a bad picture. Where are you going where they check ID and charge you later for things you didn't buy, didn't want, and didn't authorize? It's never happened to me, or most people with cards.

They may check your signature on your card. That is the only "ID" they are allowed to check, to keep the process simple and fast, and encourage users to use it.

Re:Decentralization, do you speak it?

[mcelrath]

Because the courts are the best way to reverse transactions. I've had the scenario you describe regarding road tolls and car rentals, and I challenged it with my bank. Got me exactly nowhere. I suppose I could go to court for a $75 fine, but who has time for that?

Legally some jurisdictions may consider it a one-time charge, but technically they have everything they need to perform a second charge, and it's your blood sweat and tears to challenge the fraud. That waiter skimming cards will not be deterred by your long, expensive, legal-system charge reversal plan.

Re:Decentralization, do you speak it?

[AK Marc]

Ah, so you were lying for effect. The "coffee" example was to hide the real reason. The *only* people who routinely charge without authorization are rental agencies, and if you read the contract, they gives them permission to charge you. That's (often, perhaps not always) a breach of their merchant agreement. And you shouldn't need to fight them in court. Just reverse the charges. "I never authorized that charge" should be sufficient.

And that's not fraud. And certainly not the "major source" of credit card fraud. That's skimmers.

Re:Decentralization, do you speak it?

[mcelrath]

Coffee shop employees are perfectly capable of skimming credit cards so they can perform illicit transactions also. I've had that happen to me too. The technical ability to so easily skim numbers is what enables fraud. There's no encryption there.

"I never authorized that charge" was not sufficient for my bank. So then it's off to court...

Re:Decentralization, do you speak it?

[Anonymous Coward]

I've challenged a number of transactions during my lifetime and never once have I had any trouble doing it. Call them and write a letter and the charge is reversed. However, when you signed the rental car agreement, you authorized them to charge you for tolls and parking tickets. That's not an unauthorized charge.

Re:Decentralization, do you speak it?

[david_thornley]

I've never had any problem with sending a letter by certified mail (some companies seem to ignore any letter from you unless you have legal proof they received it) and challenging a transaction.

Re:Decentralization, do you speak it?

[RockDoctor]

This has been tested in court with the car rental places that have you sign and authorize a final bill, then charge you later (without specific authorization) for parking tickets or speed cam tickets sent to them later.

The law, or rental company policy, may differ in your country to mine, but every time I've hired a car (lesseeeee.... 5 countries on 3 continents) I've read the contract before signing it and seen the authorisation for such charges. (OK, in Russia I had to get it translated for me, but that only took an hour or so.)

I have never had such a charge made against me though. "Not getting caught" being the first rule of driving, at least in my book.

That is the only "ID" they are allowed to check, to keep the process simple and fast, and encourage users to use it.

Again, country and time dependent. In Russia, because I couldn't provide my internal passport (didn't have one ; not Russian) I had to pay with cash. But I gather that is just what happens when you're not in Moscow or St Petersburg - if you're the first non-Russian they've seen, you expect weird things.

they must hate cash, too

[TheGratefulNet]

since that's the ultimate anon payment system.

of course, we know what's going on. they hate having to compete against another company.

poor babies!

Re:they must hate cash, too

[Anonymous Coward]

Yes, they hate cash, its their biggest competitor. Also, strangely, bitcoin is not a company. So thanks for all the super deep insight you've shared about the payments industry..

Re:they must hate cash, too

[Impy the Impiuos Imp]

Exactly. One of the benefits of a cash is anonymous transactions, one of the rights people reserve unto themselves.

Making everything electronic so government can track it is just another sad cog in the panopticon the government is building, a precursor to a 1984-like dictatorship.

Re:they must hate cash, too

[Anonymous Coward]

You're wrong, it's ALREADY 1984.
Both bitcoin's and your job is to bring us OUT OF IT.
That means restoring our natural rights to anonymity.
You know, that stuff that got stolen from us by corps and govs.

Re:they must hate cash, too

[mjwx]

since that's the ultimate anon payment system.

of course, we know what's going on. they hate having to compete against another company.

poor babies!

They absolutely hate cash... but seeing as the same forces who issue cash also grant them license to operate, they cant do jack shit about it.

But Bitcoin... there's people they can sue.

Seriously, if it were legal for MasterCard to punish businesses who accept cash, they would.

Re:they must hate cash, too

[witherstaff]

They already do try to punish businesses for accepting cash. They require merchants to suck up the cost of accepting Credit cards and not allowing a company to charge more to cover the credit card merchant fees. Of course 'cash discounts' can be done but that's uncommon. Most places just suck up the %3 as part of the cost of business so anyone paying cash does essentially pay more.

Re:they must hate cash, too

[mjwx]

They require merchants to suck up the cost of accepting Credit cards and not allowing a company to charge more to cover the credit card merchant fees. Of course 'cash discounts' can be done but that's uncommon. Most places just suck up the %3 as part of the cost of business so anyone paying cash does essentially pay more.

First I'll say that this little gem in the T&C is illegal in Australia (and anywhere else with semi-sane consumer protection). Hell, even in the United States I've negotiated better prices with cash because of merchant fees.

But this rule does not discriminate against cash accepting businesses. Everyone who accepts credit cards has to pay, even if they have no cash facilities what so ever.

In fact, it helps businesses that do accept cash because they have a percentage of transactions that are not subject to merchant service fees so they make more profit by giving a slight discount meaning a business has no incentive to refuse cash.

Re:they must hate cash, too

[tlhIngan]

In fact, it helps businesses that do accept cash because they have a percentage of transactions that are not subject to merchant service fees so they make more profit by giving a slight discount meaning a business has no incentive to refuse cash.

Depends on the business. Small businesses do see the discount since the amount of cash is small enough that the cost of handling cash is basically nil.

Larger businesses can find the cost of handling cash is larger than the merchant fees - cash handlers get special training because they need to know how to reconcile their cash box, then there's actually making the cash deposits. Those can be big enough that whoever's carrying the wallet is a nice target of robbery. A big game release or something can easily mean a $50,000 take in cash in a single day, requiring hiring guards and armored vehicles to transport it to the bank.

Re:they must hate cash, too

[mjwx]

Larger businesses can find the cost of handling cash is larger than the merchant fees

Sorry, but this is utter bollocks.

I've worked deploying EFT systems both large and small. I can tell you there is a large American petroleum distribution company who's merchant fees utterly dwarf their staff costs. I'm sure they're not the only ones. A large Australian supermarket chain has stopped buying card only automatic checkouts because they aren't being used enough.

Cash and debit are far cheaper than credit. The problem is banks have addicted people to credit using rewards programs and charged the merchant to accept cards (which well and truly pays for them and some).

Re:they must hate cash, too

[Anonymous Coward]

My only note here is that a cash transaction requires the physical currency representation to change hands. This means the people must be in the same room with each other, or through some proxy. Either way, you lose a little anonymity there.

Re: they must hate cash, too

[AvitarX]

I'm pretty sure they hate MasterCard gift cards too.

Re: they must hate cash, too

[AvitarX]

I'm pretty sure the cash discounts are about taxes. Places that have them usually have them well above the fees.

Large businesses have other ways to avoid taxes, so they don't need to preferentially accept cash.

Re:they must hate cash, too

[AmiMoJo]

I often use credit because it gives me extra protection, beyond what consumer law and the merchant offers. The merchant should view it as the cost of getting business from me, because I wouldn't buy something expensive from them if I had to pay in cash. In fact only accepting cash or debit on high value items screams scam to a lot of people in the UK for this very reason.

For cheap things or small retailers I'll use cash or debit though. No way I'm paying for a car in cash and missing out on that extra protection though, because even if it does add a few percent to the cost it's worth it. People have been known to claim tens of thousands of pounds back from the card issuer when the dealer went bust, having paid only a £100 deposit on their credit card.

Re:they must hate cash, too

[Anonymous Coward]

That is so oblivious. Mastercard may have an axe to grind should it be forced to start accepting bitcoin (there are ATM's after all that deal with BC, it's only a matter of time till someone tries to use their Mastercard to pay someone in Bitcoin.)

Here's the problem. If I pay with my Mastercard, like I always do to a merchant that accepts USD or BC, then Mastercard is going to default to USD and charge me the exchange rate from my home currency at the time of purchase. However if a Merchant only accepts BC, then Mastercard has to buy BC at a spot price, which might be inflated from one moment, to crashing at the next.

That's the issue here. There needs to be some form of regulation for how people use cryptocurrencies, otherwise both merchants and payment card vendors are going to try their damnedest to never deal with it.

Re:they must hate cash, too

[Anonymous Coward]

Also a single counterfeit bill, can easily wipe out any discount given to the last 100 people. So it's more expensive to accept cash unless accepting only coin.

Re:they must hate cash, too

[Anonymous Coward]

That's right, and the only way that happens is if people refuse to comply with any "regulations".

It's a cold war, and the only way to stop it from becomming a hot war is by winning the cold one.

Re:they must hate cash, too

[jeffmeden]

Larger businesses can find the cost of handling cash is larger than the merchant fees

Sorry, but this is utter bollocks.

I've worked deploying EFT systems both large and small. I can tell you there is a large American petroleum distribution company who's merchant fees utterly dwarf their staff costs. I'm sure they're not the only ones. A large Australian supermarket chain has stopped buying card only automatic checkouts because they aren't being used enough.

Cash and debit are far cheaper than credit. The problem is banks have addicted people to credit using rewards programs and charged the merchant to accept cards (which well and truly pays for them and some).

The cost of attendants/clerks/etc (who don't go away when credit is used) is not the only factor. Getting enough denominations for each day (small coins/bills from the bank are only fee-free when you ask for small quantities), reconciling the drawers, counting the cash, cash theft and counterfeit bills, etc all add up quick. Merchant fees and fraud chargebacks are certainly non-negligible but cash is not the silver bullet. That would be using silver (or gold). What could possibly go wrong with having an ultra-high precision scale at each register?

Re:they must hate cash, too

[ultranova]

Cash and debit are far cheaper than credit. The problem is banks have addicted people to credit using rewards programs and charged the merchant to accept cards (which well and truly pays for them and some).

People are "addicted" to the idea that some fraction of the increases in productivity show up as increased income. That hasn't been true for a long while. Cheap credit has been used to mask this robbery of the working class, but now the ride is over and the bill is in the mail. And since middle-class buying power is no longer supporting the economy, it's slowly collapsing.

Oh well. At least future historians should find it interesting to compare this collapse to the collapse of communistic economies, seeing how they happened just a few decades apart, and were caused by failures to keep up the opposite sides of a complete economic system, supply for communism and demand for capitalism.

Re:they must hate cash, too

[ZipK]

They require merchants to suck up the cost of accepting Credit cards and not allowing a company to charge more to cover the credit card merchant fees. Of course 'cash discounts' can be done but that's uncommon.

Not any more:

Beginning January 27, 2013, merchants in the United States and U.S. Territories will be permitted to impose a surcharge on consumers when they use a credit card. Historically Visa has not permitted retailer surcharging, but allowing surcharging was a key provision required by merchants to settle long-standing litigation brought by a class of retailers in 2005.

There are states in which a surcharge for credit card usage is illegal, but these states typically allow for cash discounting.

Re:they must hate cash, too

[Anonymous Coward]

If you want to mess with the credit card companies, run your credit card up to the limit every month and then pay it off completely on the day the bill is due. Basically free $ for the monthly credit card cycle and (bonus! - if you have the right account) you get interest on the $ over the course of said monthly billing cycle. Alas, with interest rates so low, it doesn't have the bang for the buck it used to have...

That said, the credit card companies are aware of this as they attempted to try to get the laws changed at some point in the past so they could "bill" people for paying off their credit cards every month. I believe they posed it as a "usage fee". From their perspective, for some reason, it didn't fly back then. They were openly and widely mocked.

I will not conjecture whether they could do it today either via congressional graft - oops, sorry, I meant campaign contributions - or (even more cheaply) via the SCOTUS with a suitably cherry picked and carefully constructed lawsuit.

Re:they must hate cash, too

[twebb72]

Agreed. This is MasterCard complaining about how they're business model is threatened by BitCoin. Interchange is what keeps them printing money.

Re:they must hate cash, too

[PRMan]

The Supreme Court recently overruled this in the US. Now you see many more businesses (especially gas stations) giving a cash discount.

What next?

[Anonymous Coward]

Then there's that horrible, horrible, evil non-tracking cash thing.... where they get no fees!

I agree

[Charliemopps]

. "Any regulation adopted in Australia should address the anonymity that digital currency provides to each party in a transaction," the company's told the inquiry into digital currencies. MasterCard believes that "all participants in the payments system that provide similar services to consumers should be regulated in the same way to achieve a level playing field for all."

For the first time in my life I totally agree with the credit card industry!
Mastercard, please immediately start providing anonymous transaction services so we can level this playing field ASAP!

Re:I agree

[e065c8515d206cb0e190]

I'm sure they would like to, but they can't. Have you heard of something called financial regulations?

Re:I agree

[Anonymous Coward]

It isn't mastercard that imposes the non anonymous nature of transactions, it is government financial regulations and in many ways it is done to prevent a lot of the scams, money laundering and theft that plague bitcoin.

Re:I agree

[bloodhawk]

no thanks, I like knowing I have a way to reverse transactions for scumbags that scam, I also like to know their is financial obligations on places like mastercard to reimburse me for fraudulent transactions, all of the protections disappear with bitcoin type anonymity. I have no need of anonymous financial transactions for credit cards.

Re:I agree

[ShanghaiBill]

I'm sure they would like to, but they can't. Have you heard of something called financial regulations?

Can you cite a financial regulation that prohibits anonymous financial transactions? Since cash, bitcoin, and anonymous prepaid debit cards are all legal, I doubt if any such regulation exists.

Re:I agree

[bloodhawk]

I'm sure they would like to, but they can't. Have you heard of something called financial regulations?

Can you cite a financial regulation that prohibits anonymous financial transactions? Since cash, bitcoin, and anonymous prepaid debit cards are all legal, I doubt if any such regulation exists.

I can, In Australia it is the financial transactions reporting ACT, meant to prevent money laundering and it is imposed on all financial institutions. As I understand it many other countries have similar financial regulations for both money laundering and "terrorism" finance tracking. It kicks in at various amounts.

Re: I agree

[Anonymous Coward]

Australia? Never heard of it.

Re:I agree

[Pax681]

Money Laundering Laws... pretty much EVERYWHERE

Re:I agree

[Anonymous Coward]

I can, In Australia it is the financial transactions reporting ACT

Close! It's the Financial Transaction Reports Act 1988 (C'th).

Re:I agree

[bloodhawk]

meh, been a while since I had to deal with it, close enough though :-) thanks.

Re:I agree

[Charliemopps]

I'm sure they would like to, but they can't. Have you heard of something called financial regulations?

What's your point?

Do you think that the credit card industry had nothing to do with how regulated financial transactions are?
Do you seriously believe the biggest competitor they could possibly have... Walmart... just so happens to be hamstrung by those very same regulations and unable to compete?

No no... I'm sure it's all a coincidence and they aren't actually angry at Bitcoin because it found an endrun around the completely unlevel playing field the credit card companies themselves designed. Visa and Mastercard are all about fair play and not just glorified loan sharks.

Re:I agree

[Anonymous Coward]

And it only 'kicks in' when dealing with those entities, ie: banks.
YOU are free to deal with anyone who is not a bank, ie: fellow 'you's' as you wish.

Re:I agree

[gox]

all of the protections disappear with bitcoin type anonymity

Reversing transactions requires arbitration, which is quite possible with or without anonymity (although, you wouldn't want to provide delivery receipts for physical items if you need to remain anonymous).

Actually, decentralized & pseudonymous systems like OpenBazaar which work with Bitcoin provide trustless (i.e. the notary can't steal your funds, unlike a trusted escrow) arbitration services. This sort of opt-in protection is better than what you get with Mastercard, but considering the technology is immensely more complex than what is used in centralized systems and that it is mostly open source (negligible funding), more time is needed until it matures.

I have no need of anonymous financial transactions for credit cards.

I would agree with this. Most of the problems with credit cards is because they are pull payments. The fraud levels would be immense if it became anonymous.

It's very convenient to not be required to give out personal info to prove you are not a fraud, though. It's also good for security: no "pull payment" info to steal when one of the companies you work with has a data breach. So I think from the consumer's perspective it is better in the case of push payments.

Re:I agree

[Xylantiel]

Right... transaction reporting. The bitcoin register is public. Everything is reported to everyone. That's how the system works.

Re:I agree

[Anonymous Coward]

actually no, it kicks in with anyone dealing in monetary transactions. it applies to banks, credit card companies or anyone that wishes to process person to person money transactions.

Re:I agree

[bloodhawk]

transaction reporting requires you to be able to identify both parties, not just report a transaction took place.

Re:I agree

[Anonymous Coward]

And it only 'kicks in' when dealing with those entities, ie: banks.
YOU are free to deal with anyone who is not a bank, ie: fellow 'you's' as you wish.

NO, it actually applies to all businesses dealing in money exchanges. including banks, casinos, money lenders, bookies, brokers etc. etc. and according to the laws it should also be applying to bitcoin exchanges too though that hasn't been tested yet.

Re:I agree

[purplie]

Yeah! When I purchase something, please make sure my account can't be identified as the one to subtract from!

Re:I agree

[Jahta]

Money Laundering Laws... pretty much EVERYWHERE

Mod parent up! In fact, in many jurisdictions payment processors are required by law to monitor for and report "suspicious" payments. Individual staff can be held liable, and go to jail, for not doing it.

And cash is no answer. Large cash withdrawals count as "suspicious".

Re:I agree

[Anonymous Coward]

For the first time in my life I totally agree with the credit card industry!
Mastercard, please immediately start providing anonymous transaction services so we can level this playing field ASAP!

"gift cards" that I have seen have mostly VISA logo.
What is not anonymous when purchasing gift card with cash and registering it to bogus name and address?
If ... you do not order shipping to your physical address.

Re:I agree

[u38cg]

They are not illegal per se. However, there are plenty regulations around how these things are used. Try depositing £20k cash in a UK account and see how anonymous the source of that cash becomes.

Re:I agree

[drinkypoo]

You probably have regulations regarding gaming winnings, too. We do here in the USA at the federal level, because gambling houses have often been used to launder money. Take it into the casino, convert it, play a little, convert it back, claim it as gambling winnings, pay the taxes. So any person who converts $5,000 or more (or has a slot win of that amount) will have their identity recorded, and the amount of their winnings for the day.

Re:I agree

[bloodhawk]

Casino's fall under the same laws. The laws aren't specific to banks, they apply to all businesses that deal in money exchanges. even bookies, cash transactions with lawyers, transferring money in and out of country, any transaction that may be deemed as suspicious etc etc. unlike the US though we don't tax casino winnings so from experience the US is actually a lot harsher on controlling casinos.

Re:I agree

[T-ice]

With cash I have to authorize every single transaction by reaching into my pocket. With credit/debit card transactions, I only need to have reached into my pocket at some time in the past to pay. Cash and bitcoin put the power over payment back into your hands, instead of the merchant. You, (or someone who stole your key) has to authorize every single transaction. It is true that it makes takesee backsees harder to pull off. But, they're already a pain anyway. Mastercard doesn't provide any recourse for unauthorized transactions, you have to take that issue up with the merchant. They just make it easier for their paying customer to withdraw your money.
Some form of crypto should be used for ALL digital transactions. The fact that when I make a purchase with my MasterCard provides the party that I'm paying enough information to continue making charges whenever they like absolutely infuriates me. It means I have to trust both the integrity as well as the security practices for every place where I use my card. If only we had a technology that could fit on a credit card that could digitally sign a transaction so that a register never sees the key. Maybe that kind of technology will be made available 10 years ago or so.

Re: I agree

[Anonymous Coward]

Maybe some day you'll figure out the difference between the industry that Walmart operates in, and the one that MasterCard operate in.

Deregulate rather than Regulate

[Anonymous Coward]

Perhaps the solution to a level playing field is to deregulate M/C instead and see if they can compete with an anonymous, fee-less payment system.
Free market et all right?

Re:Deregulate rather than Regulate

[Anonymous Coward]

Bitcoins aren't "fee-less", really. If you don't pay a fee, your transaction sits in limbo for however long, leaving you and your vendor standing around like dopes high-fiving one another over how great and practical Bitcoin is. Then you pay a cut to whomever exchanges your Bitcoins into adult dollars for buying groceries and paying taxes. Fee-less. Hah.

Re:Deregulate rather than Regulate

[Anonymous Coward]

Have you tried a fee-less transaction?

Usually getting confirmations within seconds.

Wait, a level playing field?

[Anonymous Coward]

I don't hear them complaining when it's tilted their way.

18-21% and higher interest rates? Obscene late fees on top the the obscene interest rate?

Yeah, I don't feel sorry for them. Not even a little bit.

Re:Wait, a level playing field?

[Anonymous Coward]

That is the lending institution. Visa and MasterCard are a point of sale terminal network which allows financial institutions to link accounts to magnetic strips on a piece of PVC plastic. Interest rates and fees are normally set by the lending institution.

Re:Wait, a level playing field?

[Anonymous Coward]

Look up transaction fee. Visa/Mastercard name is not free. They get a cut from each transaction done.

Smaller retailers refuse to swipe a card if it is less than a particular amount. Because that fee eats their margin.

Re:Wait, a level playing field?

[Anonymous Coward]

Look up transaction fee. Visa/Mastercard name is not free. They get a cut from each transaction done.

Not actually true. Fees are established between the banks. Different pairs of institutions have different agreements. Sometimes the merchant's institution and the card holder's institution are one and the same. In that case it makes no sense for the bank to use an outside processor, or to charge itself anything. The merchant bank will however charge the merchant for the convenience of the transaction. The card branding company (MC or Visa) never even sees that transaction, let alone charges a fee for it.

Card brand companies typically get revenue from three sources. Licensing fees charged to banks, processing fees (where they compete with tons of other processors, not just MC, Visa and Amex) and additional financial services mostly to financial institutions. MC and Visa only get a "transaction fee" if they act as the processor for the transaction, and they have plenty of outside competition from other companies and even some governments. If they do process the transaction, their cut is a tiny portion of the total fees charged by the issuer to the acquirer, and is competitively priced, given that many other companies exist that could offer to do it for less if they wanted.

The payment card industry is a lot more competitive and nuanced than most people think.

Re:Wait, a level playing field?

[Anonymous Coward]

If people in Africa don't want to catch HIV maybe they should just wear condoms? Oh wait! Many of the people catching HIV in 3rd world countries have never benefited from a 1st world education! My bad!

There are various degrees of financial education, and for the most part: the people who understand money are perfectly content that the rest of the population doesn't. If they did: we might have to get a real job instead of sucking blood from the dumb unwashed masses.

Blaming him for not learning these lessons is making the assumption that he had parents to teach him these things(that weren't renting furniture and using payday loan services themselves).

I had an upper-class childhood(and elected for poverty in my young 20's) so I'm not pretending there isn't some "marshmallow experiment" at play here as well. But it's a total "just-world fallacy" to assume that everyone with credit card debt was given equal opportunities at higher education, could afford traveling to job fairs, had an internet connection growing up, didn't have shitty teeth from lack of dental care and a food stamp diet, etc.

When you can't afford to live in nice neighborhoods, you find your "cheaper" apartments come with predatory tow trucks, deadbeat roommates who lie about paying rent and hide eviction notices while you're out of town, roommates who steal, skanky GF's who get your car seized after a DUI, family members who want you to bail them out of jail/pay for their abortion. The list goes on and fucking on. They frequently can't live close to their jobs or afford car insurance so they're riding public transport and have to burn 30 minutes of every day on early arrival/late departure. Traveling takes longer, they get paid less, cops hassle them more. Best part: if their unreliable used car breaks down too often because they can't afford anything better: they get fired from their job. By the time they're 25(if they are disciplined) they have just caught up to the opportunities an 18 year old kid from a good family has right out of high school. That's 7 years of lost resume experience(shit jobs are bad for your resume), lost accrued interest, and lost youth. By the time that kid is 25, he owns the company that they work for, and every $1 they make: that kid makes $2. They will NEVER catch up at that rate and the advantage of that early start continues to compound. Mean-while they are working 50+ hours a week trying to "work their way up the ladder". Those extra 10 hours aren't free, they age you.

At the end of it all you end up with a human version of "rat park" where these wretched people have very few reasons not to kill themselves(other than unintended pregnancies in many case-multigenerational education problem as much as anything). They frequently start abusing substances because getting drunk or high at home is a cheaper way to blow-off that stress(that they are accumulating at a more aggressive rate) than it would cost for them to get the same entertainment value from movie tickets or dinner at a nice restaurant.

Frequently, it's the people who managed to escape poverty who are most eager to jump on the shit of someone who didn't. I'm not sure if it's because they have a story they want an excuse to tell if someone dares challenge them, or if they need to elevate themselves and draw distinction between themselves and the unwashed masses because they are insecure they didn't come from good breeding and are afraid that we can smell it on them. We'll notice the herpes outbreak, or the bad teeth, or the medium price clothes(not very many of these items) and realize that they aren't one of us. A cheap distraction ploy because they know the stigma/stink that goes with poverty. That complete inability to relate, the awkward silence, but worst of all: the fear/knowledge that if we stand too close to them that some of their problems might rub off of them on to us. Their problems(and if they're poor they have problems) will become OUR problems, and we know from experience: if we know them long enough, it WILL happen

Re:Wait, a level playing field?

[Your.Master]

Okay, that was a lot of talk about people being raised in shitty situations, which totally happens.

I still say that you don't need a financial education to know that you shouldn't buy something you can't afford, or that you should read the credit card application that you're filling out. A much better argument could be made about extreme emergencies that can hit poor people ("my kid broke his arm, we have no health insurance, no cash on hand, but there was this credit card...").

Re:Wait, a level playing field?

[Anonymous Coward]

Yeah... Really competitive... Visa and MC are the ONLY cards that are accepted everywhere. Bitcoin could change that. I'm all for it. I really hope Visa and MC die. They have done exactly NOTHING to secure people's money. The only thing they do is extract more and more. Sure, banks are probably in that too. But most banks deserve the same destiny.

Awww...

[Anonymous Coward]

MasterCard believes that "all participants in the payments system that provide similar services to consumers should be regulated in the same way to achieve a level playing field for all."

How cute, how cute.

Translation: Surveillance for all!

[Anonymous Coward]

Companies don't even try to hide the huge surveillance network that they've built from the public any more.

stupid laws and payment processors -mastercard etc

[Anonymous Coward]

1. You literally can't regulate bitcoins due to its technological design/nature- you can only outlaw your citizens from using it- but that doesn't really work as everybody will just become an outlaw- so it doesn't really solve the problem either.

2. You'll push business overseas. Why should I setup in Australia if it's more difficult? In fact your system is so screwed up that its actually in my companies interest to NOT setup in Australia already. We've setup operations in Europe, but not Australia. You've ensured that by having a modern postal system with quick and hassle free delivery. You also don't tax your citizens non-Australian purchases to the n'th degree (under 1000AUD which is about 1000 USD there is no tax collected on delivery).

3. Bitcoins is being adopted by online merchants in droves because of the laws, stupid card payment processors, and the lack of adoption of modern technology to fix fraud issues. You have not provided a means of protecting merchants from fraud and as such they are adopting bitcoins in droves. I realize that Australia may have adopted better technology (I don't know that for a fact) than the US, but it's not remotely adequate. As soon as the US adopts it all bets are off. The security system will fail because it wasn't designed properly. We need a secure-id like system with on-board pin and authorization system to prevent fraud. When a user has to authorize each transaction on the payment card itself and the merchant doesn't have to become a victim of fraud to accept payment cards the problems will be solved. We should not simply pass the costs of accepting payment cards to the merchants. We should fix the security problem instead.

Huh

[nitehawk214]

If both sides agree to accept Bitcoin and both sides are fine with the anonymity, why does MasterCard's care? Oh right, they want the government to step in and make it illegal (tried it, didn't work), put in a bunch of regulations that send Bitcoin out of business (obviously they don't understand what Bitcoin is as that won't work either) or at the very least force people to use MasterCardCoin. (why would anyone?)

Only a matter of time

[Anonymous Coward]

When the TPP gets signed it'll only be a matter of time before something like this is put into law, lest the 5% processing fee overlords sue the government for billions in lost revenue...
TPP benefiting Australia

Re: bitcoin is NOT anonymous

[Anonymous Coward]

When I do some kinds of stuff on the net I do it with a spoofed MAC address at a coffee shop or other public wifi access point.

The right to privacy

[Anonymous Coward]

Well the right to privacy is a basic right, yet Mastercard is flipping that on its head and requiring the removal of privacy with this claim.

Does Mastercard hand its data to marketers? Does it hand it to NSA? Does it hand data on European transactions to USA? Does it spy for a foreign power? The transaction data for Germany, is that handed to the UK? Does the UK get Merkels transaction information, and the transaction information on other European politicians, and businessmen?

Why is the right to privacy such a problem for Mastercard???

Read my lips... Bitcoin is NOT Anonymous!

[Anonymous Coward]

It never was and it never will be.

There are very difficult ways to USE it anonymously but then... that's usually easier done with a TRULY anonymous coin like CASH.

Fucking retards.

Re:Read my lips... Bitcoin is NOT Anonymous!

[Anonymous Coward]

What are you talking about? Neither the Slashdot summary or the MasterCard paper claim Bitcoin being anonymous. We all are professional, educated people who know that it's pseudonymous at most.

Re: Read my lips... Bitcoin is NOT Anonymous!

[Anonymous Coward]

What about Dark Wallet?

Re:stupid laws and payment processors -mastercard

[Anonymous Coward]

"In droves". Heh. Pull the other leg, it plays jingle bells.

"Bitcoin's (Semi-)Anonymity"

[mmell]

s/Semi/Pseudo

FTFY. Incidentally, we all remember what "pseudo" means, right? Ersatz? Imitation? Fake?

New money.

[Anonymous Coward]

The death throws of the old world money.

Re:New money.

[Anonymous Coward]

That doesn't parse. Perhaps you meant "throes"?

can be anon with a little hassle

[Anonymous Coward]

by default no it isn't. With a little work it can be.

Spoof a MAC, connect to some open wifi, and / or use a privacy oriented VPN from some random country send coins through any of the mixing services or send to one exchange, bounce to another and destroy any taint between addresses. If you want to get more creative convert to an alt coin,or multiple alt coins, bounce those around the globe, reassemble in some location to pay for whatever you want.
New alt coins are being made to do this sort of thing automatically

But according to the ATO, bitcoin is not currency

[vagsuki]

Since the ATO (Australian Taxation Office) put out their 30 September statement saying that Bitcoin is not a currency and is actually a good (thus attracting the 10% GST) I don't think MasterCard have a solid argument. Until I can pay my Australian tax in bitcoin (or other crypto currency) I don't think MasterCard has much to worry about.

Cash

[Anonymous Coward]

They should also move against the reserve bank for issuing anonymous cash.

Standard 3 phases

[UnknownSoldier]

From Gandhi

1. First they ignore you
2. Then they laugh / try to discredit you
3. Then they get a clue and join you

Mastercard, please start posting ALL the data

[Anonymous Coward]

bitcoin does it, level the playing field and open up ALL the transactions in the credit card databases to the public.

What a great idea Mastercard!

"Help wanted"

[tlambert]

cash handlers get special training because they need to know how to reconcile their cash box

"Help wanted. Must be able to add. No English majors, please."

Give me a break...

Re:"Help wanted"

[Anonymous Coward]

Have you ever had to count a till? It certainly isn't rocket science, but I worked a till for 6 years in a gas station and it took quite some time for every new employee to get the process down. i.e. the drawer starts with x amount of dollars in it, so you have to remember to count that amount off of your total and leave that much in the drawer for the next shift. Didn't help that they way they taught everyone was a bit backwards, but not everyone in that kind of job is capable of figuring out how to do it themselves.

Plus don't forget about how cash tends to create sticky fingers. It is much harder for an employee to steal via no sale or pretend to pay style schemes when everything is electronic.

Also their 5 cents off with cash is a joke. Any decent rewards card is going to get you at least 2% on gas purchases so you are getting 5+ cents back on gas down to $2.50 per gallon. I had a card for a while that was 5% on most used categories (which always included gas for me) so back when gas was closer to $4 my card was giving me 20 cents per gallon.

Re: bitcoin is NOT anonymous

[tlambert]

And you do it with a unique MAC address, duly recorded by the ISP that provides service where you slurp your caffeine.

The AC already stated that the MAC address was spoofed. Good luck finding the hardware device that has 0a:0b:0c:0d:0e:0f.

Re:stupid laws and payment processors -mastercard

[Zontar The Mindless]

"Setup" (one word) is a noun. The verb is "set up" (two words).

They're even pronounced differently: This is a sétup. I'm going to set úp the router.

(Doing the grammar Nazi thing since the parent is basically insensible.)

Digital

[Meneth]

MasterCard writes:

Consumers have no recourse if a digital currency loses its value or if the digital currency system fails.

Consumers have no recourse if a national currency fails either.

Also, national currencies are mostly digital nowadays. MasterCard themselves do nothing but digital transactions.

Re:Digital

[countach]

True, although national currencies are unlikely to fail. Governments will tax their citizens in the local currency, so there is incentive for people to earn the local currency, which means there is incentive to work for the local currency. Only gross incompetence by a government can screw up this natural system. The basis for bitcoin having value however is much more tenuous.

Re:Digital

[Anonymous Coward]

Consumers have no recourse if anything loses its value.

What happens to the investors when a company goes bankrupt? They get a portion of diddley with a side order of squat.

What happened to people that bought into any of the "cloud" providers that went tits-up? Did anyone get their money back for services pre-purchased but not yet rendered? I doubt it.

What happens when you buy a crappy car that dies out of warranty? "No recourse" barely covers the extent of that one. For some people, it can put their entire life into a tail-spin.

Mastercard needs to worry about their own problems, like facing competition and finding a way to survive against it without pathetic whining and lobbying (but I repeat myself).

Re:Digital

[iggymanz]

HA !!!!! "national currencies are unlikely to fail". You never took history in high school? Major national currencies failed in the last 120 years, and the fallout of that HUGE, world maps rewritten for one particular case

Only in America....

[buckfeta2014]

Oh wait.

anonymous credit card

[Anonymous Coward]

Mastercard, please immediately start providing anonymous transaction services so we can level this playing field ASAP!

They already do:

http://www.mastercard.us/prepaid-gift-card.html

Paypal disintermediation

[Anonymous Coward]

Paypal itself carved its niche with dis-intermediation, so why complain about dis-intermediation now?

they made their bed

[slashmydots]

Let's back up about 2 years. Mastercard said they were going to create a bitcoin-backed credit card. Then they pulled out of the project unexpectedly after getting everyone in the community excited about it. So now that bitcoin grew to huge popularity, they get exactly what they deserve for stabbing us in the back.

Re:they made their bed

[Anonymous Coward]

wait, what? bitcoin has huge popularity?

Re: bitcoin is NOT anonymous

[Eevee]

0a:0b:0c:0d:0e:0f.

0a:0b:0c:0d:0e:0f?

Yes!

That's amazing. I've got the same combination on my luggage.

Obligatory Car Analogy

[Anonymous Coward]

Yeah, this argument worked really well for taxicab services when Uber and other ridesharing services started popping up.

I call bullshit.

[rs79]

"the company's told the inquiry into digital currencies. MasterCard believes that "all participants in the payments system that provide similar services to consumers should be regulated in the same way to achieve a level playing field for all."

That would imply bitcoin have have to adopt predatory practices.