Slashdot Mirror
Visa, Mastercard Mull Increasing Fees For Processing Transactions: Report (reuters.com)
Visa and Mastercard, the two biggest U.S. card networks, are preparing to increase certain fees levied on U.S. merchants for processing transactions that will kick in this April, the Wall Street Journal reported on Friday, citing people familiar with the matter. From a report: Some of the changes relate to so-called interchange fees, the report said. Interchange fees are what merchants pay to banks when consumers use a credit or a debit card to make a purchase from their store. Fees that Mastercard and Visa charge financial institutions, such as banks, for processing card payments on behalf of merchants are also set to increase, the report said.
Definitely not collusion
When you saturate the market to the point where you can't grow anymore, you got to raise prices. Their cost of doing business hasn't gone up, so there's no real reason to raise prices other than to appease Wall Street.
he has never spoken to a woman without saying his credit card number first
On a dirty middle man don't get shocked when they try to take advantage of you. I wonder if other payment processors have a chance to spring up or has "regulation" there become just another high barrier to entry there as well instead of a tool to protect the consumers?
only cash for me.
Google or Amazon could end you. It could happen fast and bad. All that's needed is a nudge, and raising merchant fees could be just that.
They should be lowering fees as an attempt to stave off the inevitable.
Charge merchants to allow cards to be used, charge interest on cardholders... Same service at a higher price. What's not to like?
What needs to happen is that merchants start offering anywhere 1-3% discounts for cash or debit card purchases. Only then we will see a decline in the use of credit cards.
I noticed a year or so ago that more of our local businesses are charging fee's for using a credit card or even debit. I'll bet some people don't even know because unless you read the signs discretely posted. It get's passed along no matter what, but now it seems more directed at the card user then overall price increases for goods and services. What bothers me is how many of these businesses who charge the fee, now continently has a ATM machine in their businesses. That tells me they are getting a cut off the ATM fee's if you choose to pay cash and try and avoid the card charge.
Bitcoin is the answer!
What was the question again?
Have gnu, will travel.
would be a shame if something happened to it!
Ahh let the rent-seeking continue!
What's the fee for these kinds of cards - less? If so, maybe that's what they want as it reduces the bank's risk of non-payment. If not, then it's just rent seeking.
I guess we might get another incentive to use cryptocurrencies with light commissions...
I'm sure with the state of technology and all, the costs to keep track of these records are rising and the credit card companies are just keeping up.
Fraction of a penny from every online transaction. Replace the b with a tr. There does not seem to be a way out either.
Just stop using credit cards whenever possible. They inflate your prices and rob you with interest.
If the US government were capable of asserting intelligent policy, we would move to create a payments system where these middlemen aren't de facto taking over the payments infrastructure in the country. And, to be specific, scraping 3% margin on every transaction while they do it, enriching banks, costing merchants, while doling out some measly awards to customers who know how to take advantage.
For example, China is in real danger (maybe already happened) of a private company taking over their national payments infrastructure and going out of control.
There are legitimate exercises of public authority -- trust and control of the monetary and payments system is one such thing I would argue. Lots of countries have figured out how to roll out a very low cost, secure, instant bank transfers system -- shouldn't we consider it?
Don't know which one though
Makes PayPal look more attractive?
In addition to the usual advantages (login with one company, instead of sharing your "secret numbers" with all and sundry), this can only make their processing fees look more competitive.
Encouraged by their own self-interest, many stakeholders (governments, tax authorities, retailers, customers) give a small number of oligopolists huge market power to increase their revenues.
The oligopolists do so and everyone is surprised.
You all went cashless, retailers all went cashless, and now you're surprised that the payment infrastructure operators are taking the opportunity to charge more? Why are you surprised that an under-regulated profit-making entity in a position of great power would choose to make more money if they could?
Payment processors have too much power, given to them by retailers and by consumers.
Consumers who willingly said "I never carry cash", who say "I want to pay by card", who choose to let several other people get between them and the person they're buying from. Instead of you handing cash to the merchant, now you have the card issuer, the bank, and the payment processor between you and the merchant. You're surprised that someone would try to extract more money from you?
Don't be so naive. Pay cash next time and thereafter. Reject cashless business as much as you can.
"For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled"
The reason they can do this is because the cost is being hidden from the consumer. Do you think someone would sign up for getting "2% cashback" if they were paying 2.1% more per transaction? Nope and yet that is what is happening. The cause of this is that stores are contractually required to eat the cost of the transaction fees and thus increase the price of goods to compensate. The result is that everyone is subsidizing the transaction fees, even if they pay cash which completely eliminates any desire to compete with lower transaction fees. Pass a law legally compelling stores to isolate the cost of the transaction from the goods themselves and the transaction fees will plummet because then credit card companies will have to compete for consumers.
If you are in favor the free market then you cannot be in favor of the actions of credit card companies.
Anons need not reply. Questions end with a question mark.
Google or Amazon could end you. It could happen fast and bad.
Dream on. Google and Amazon are good at what they do but bumping Visa and Mastercard out of their market? Yeah, that isn't going to happen anytime soon. They have an installed network connected to virtually every retailer in the industrialized world and they are responsible for most of the online retail payments too. Creating a payment system that could seriously threaten their duopoly will be nigh impossible even for companies as well funded as Google or Amazon. It's telling that none of the big tech companies have even tried to compete with them head on.
Furthermore do you have any idea what sort of regulatory scrutiny comes with running a financial network? You can bet that Google and Amazon and the others want no part of that mess.
They should be lowering fees as an attempt to stave off the inevitable.
I'm curious what you think is inevitable. Visa and MC have one of the deepest moats around their business I can imagine. The only real threat to them is regulatory action.
Aren't they forbidden to do so by the agreement with credit cards operators?
Not necessarily. It's fairly common to see "convenience fees" charged for the 2-4% that it costs to process a credit card transaction. My company does it and so do a lot of big companies and government institutions. There are some circumstances where the merchant agreement prohibits some actions but these are not universal. And it's not like anyone is really checking anyway most of the time.
They are already profitable every quarter why raise rates except to squeeze more money out of people.
Hmmm... two companies corner the market, lock almost everyone in, and then raise the price? Nothing wrong here if you paid off the elected officials first.
Meanwhile Paypay in Japan, Run by Softbank charges 0% for the first 3 years and is offering consumers 20% cashback all purchases up to $10 (so if you spend $50 you get $10 back), up to $500 per person (so if you make 25 $50 purchased you'd get $500 back). Off good for the next 2-3 months.
https://paypay.ne.jp/
And I know Japan (and the USA) are behind the times on alternative payment systems. Google Pay and Apple Pay are basically just your Credit Card where as these new systems in the Easy like Alipay, Paypay, Paidy, etc are entirely unrelated to the credit card system.
Credit Card companies will either compete or they'll lobby to outlaw these alternative services.
They have an installed network connected to virtually every retailer in the industrialized world and they are responsible for most of the online retail payments too.
They may. But on the other side of the counter, the customer has a Google device already in their pocket, already connected to a network.
Online? Google's already there too. Most of us do our online shopping via mobile device. There's no reason for Visa/Mastercard to be involved at all.
And they can crush Visa on transaction fees as they don't even need to turn a profit. They'll surely be selling the data on the back end. Actual transaction data is probably worth enough that they don't even need to charge for the service.
Stick it to the CC companies people.
The credit card companies could increase the fee's 20% and the merchants can do nothing about it, it's illegal for them to charge a credit card surcharge
...and since they are, isn't the simultaneous raising of the fees for the same service akin to price fixing? How is this NOT reviewable as a possible antitrust violation?
Social Media Handywoman at Texas Boys Balloo
Visa being installed to virtually every retailer in the industrialised world? China begs to differ. It's the prime industrial nation and you can't really use Visa or Mastercard anywhere except some ATMs (rarely)... Discover card and European diners club cards work in China.
there's a lot of profit right now even though we're being driven into a recession. The recession is mostly a self inflicted wound, it's not an actual decrease in the amount of money out there.
That means there's a lot of leeway in profit margins, and the only real question is who's gonna get all that money. In a down turn people turn to credit cards to get by, and businesses are under more pressure to keep taking them as a result. That's why Visa/MasterCard are looking into this.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
This is an obvious case where government intervention is required. To limit the fees the oligopoly can charge.
It has been done in Australia and other places. Visa and Mastercard threatened to leave the country. They didn't.
There's a cost involved with dealing with cash too, probably more overall than dealing with a credit card payment.
Target already has their Red Card which can be either a credit or debit card tied to your checking account. Either one gives you 5% savings immediately.
Long ago, companies had their own credit / debit cards and people carried around a bunch. Carrying around a single card is a pretty new thing. Now if you have multiple cards it's because of "rewards."
We're going to head back in that direction with more companies implementing the Target model if the generic companies keep raising rates.
Work Safe Porn
This is the way of the big banks. There will never be enough profit. Nothing is ever enough.
Corporatism != Free Market
If Apple and Google both decided to support the same stable cryptocurrency - e.g., USDC - Venmo would be out of business in a year or two and Visa and MC would be frantic.
A cryptocurrency would have to threaten the dollar to be a threat to Visa and MC and that isn't going to happen. Cryptocurrency is not a credible threat to Visa and MC. Not even a chance.
None.
Maybe if they wouldn't stiff me for thousands of dollars when someone defrauds me with a disputed purchase they can raise their rates. Fuck them!
No way they will be punished unless they own a real newspaper.
Democracy Now! - uncensored, anti-establishment news
folks seem to forget that wages have declined non stop since the 70s. Folks are leaning heavily on credit. As a business that leaves you two options: Issue your own credit (and deal with all the fun that entails) or find somebody to issue it for you.
It's easy to say "Just don't buy a fridge" but then we like to forget how many folks died of botulism back in the day. The folks I know aren't wasting a whole lot of money. Even that $5 Starbucks is down to once or twice a week, is mostly used to get them through the morning (hooray for caffeine & sugar) so they can work harder at their crummy jobs. Folks are eating out but they're doing it at "fast casual" which is to say fast food joint with nicer tile in their bathrooms.
What I'm saying is with recession always on the horizon folks are gonna put necessities on credit cards, and that's gonna give the CC companies more leverage with their merchant fees.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
there's always collusion to make even more...
visa (2018), 20.6 billion in revenue, 10.3 billion net.
mastercard (2017), 12.5 billion in revenue, 6.6 billion net.
both firms are constantly in litigation regarding antitrust issues, violations of consumer protection laws, anticompetitive behavior, etc. not just in the u.s. but around the world.. they've paid out billions in *settlements* but never an actual ruling that neuters their grip on the market they control.
Could you have possibly linked to a shitty article with less information?
But on the other side of the counter, the customer has a Google device already in their pocket, already connected to a network.
Which isn't accepted at most merchants and isn't likely to be any time soon. Visa also has a network and it's already in place. Do you know who is behind Visa? It's banks. Google would be competing head to head with banks in financial services. Stranger things have happened but that's not typically a recipe for success. You know what else people have in their pocket? A credit card (usually Visa) which works on a payment network in every retailer. Getting people to dump their plastic cards for smartphone payments has been a tough sell and there is no sign of that changing.
Online? Google's already there too. Most of us do our online shopping via mobile device. There's no reason for Visa/Mastercard to be involved at all.
Yes they are there and their payment processing infrastructure is essentially nil compared to Visa. You seem to have no appreciation of the amount of infrastructure required to operating a payment processing system that is accepted close to everywhere. Not to mention the regulatory burden and the competitive dynamics. If Google want's a piece of that market I wish them luck but many others have tried and failed and there is nothing to suggest Google will fair any better.
And they can crush Visa on transaction fees as they don't even need to turn a profit.
If it were that easy they would have already tried. Walmart has been trying to get into banking and payment services for a long time now with limited success.
They'll surely be selling the data on the back end. Actual transaction data is probably worth enough that they don't even need to charge for the service.
Visa and MC are already in this business.
Last I checked, echecks lacked the 3% take but retained an interchange fee on the order of 30 cents, calling it the automated clearinghouse (ACH) processing fee.
And this processing fee still makes echecks impractical for, say, buying access to 1 article on an ad-free website. Instead, to make up for the cost, websites require readers to buy a whole month or maybe a pack of 100 article views at once, even if 29 days or 97 page views will go unused.
Visa being installed to virtually every retailer in the industrialised world?
Yes. Outside of China proper they have approx 50% marketshare everywhere else on the globe. Outside of major cities China is still primarily a cash economy. UnionPay dominates in China but has virtually no presence outside of China. Credit cards in general are still a growing industry in China.
Welcome to the cashless society, where private firms hold the only keys to you conducting financial transactions. Bend over.
... that enough of their card users have finally wised up and aren't carrying balances--with interest rates that are approaching loan shark and payday loan levels--so they think they'll make up the difference by hitting the stores with higher transaction rates is how they plan on making up the difference in those lost customer interest charges?
Good luck with that. Stores will cut back on what cards they accept. And customers will get pissed off when the cards that are accepted at frequently visited stores keeps changing. Wait until the vendors you've worked with to do automatic payments--your mobile phone vendor, cable service, your tollway toll transponder, etc., etc.--start choosing to drop the use of certain cards and your service is cut off, and you have to pay reconnection fees while scrambling to contact all those vendors to set up new payment plans. Customers going to just love that.
CUR ALLOC 20195.....5804M
They have an installed network connected to virtually every retailer in the industrialized world
No, they don't. The card acquirers do, and they don't offer a VISA network, a Mastercard network and an Amex network. They offer card payment support.
Adding a new payment service is a back-end integration from a dozen acquirers and suddenly all those retail outlets can now accept NewCard too.
In the USA, a debit card used with a PIN goes through the EFT network (Maestro for MasterCard or Interlink for Visa), not the credit card network. The ACH fee for an EFT payment is close to the 30 cent transaction fee for a credit card payment, but EFT generally imposes no percentage of the total. This is why many brick and mortar merchants automatically select EFT when a debit card is inserted, and some offer cash back because there's no fee to increase the total.
As the world goes cashless, here's is the single biggest argument opposing that expansion. It means that every transaction has fees associated. And the knock-on implications are huge as well. So unless we all think there should be a state sponsored cash card with no fees, (as if,) we should think about this. I have trouble believing this has anything to do with anything but more profit: and certainly not operational necessity. The fees are already exorbitant.
Reject cashless business as much as you can.
Except in a lot of cases, you can't. If the local grocery store stops carrying or hides your favorite brand of sandwich cookies, for instance, you'll probably have to resort to buying them from Amazon. Likewise with unlocked phones or other electronic products that no brick and mortar store within cycling distance carries. Would you find it practical to routinely pay cash for Amazon gift cards?
What bank do you use that doesn't offer protection against fraudulent charges to its debit card customers? Last I checked, the Electronic Funds Transfer Act (EFTA) required banks in the United States to limit the cardholder's liability for fraud to $50 or so.
Sooner US market gets pissed off enough at visa/mc duopoly with their in your face brazen market collusion and security nightmare 'take' rather than 'give' models and instead move to something half way rational like SWIFT instant payments the better off we will all be.
While in Greece by law 1) merchants (and professions like lawyers) must accept credit/debit cards AND 2) are forbidden to pass the fees to the consumer. This was done in the recent attempt to curb cash usage so everything can be taxed (after the introduction of capital controls in summer of 2015 because of bank runs and the failed referendum outcome)
They're essentially signing their own death warrant; the first company to integrate cryptocurrency, then partner it with the same sort of consumer protection we associate with credit cards, will undoubtedly end up ahead.
So recently there were several stories about shops stopping to accept cash send going plastic only. Guess it's working great to give them a monopoly on money
Non-Linux Penguins ?
Unless regulated, this is where going cashless becomes a problem.
Doing so pretty much grants folks like Visa, MasterCard and PayPal the ability to charge whatever they want for " processing " fees with zero recourse. They can't do it now because folks can still tell them to F*** Off and simply use cash.
Once / if that option no longer exists, we're screwed.
no need, EU managed ot put their fees at sub 0.5% level. Why cannot this be replicated in the US?
The assumption that merchants are being fleeced by the card processors is incorrect. If merchants didn't benefit from accepting cards, they just wouldn't accept them. A few places don't accept credit cards, but most due. Why? Because it's beneficial to them.
1. Customers spend more on cards. Higher check totals means more profit for the merchant. This is especially true at restaurants, where it's very easy to add on drinks, desserts, etc. Customers using cards don't need to make sure they have enough cash.
2. Handling cash isn't free. Having cash around risks theft. Therefore, hiring an armored car service to handle cash transportation is commonplace. That service isn't free. And even then, the risk of employee theft still remains.
3. Online retailers wouldn't exist without credit cards.
I don't really care what these companies charge, so long as every point of payment offers a discount to people electing to pay by a competitive method with a lower cost structure (one of these may involve cash).
Cash Might Be King, but They Don't Care
And there's the problem in a nutshell.
That is NOT about credit card fees!
How much of that cash do you think gets reported for income tax!
Wepay is the growing industry. Credit cards, not sure either way, but could be an uphill battle for them.. yet here they are jacking up fees in an increasingly competitive marketplace.
Such financial topics really make me sick because for my whole life I can't get out of financial troubles which is exhausting... At least I can always rely on https://paydayloan.network/online-loans.html in case emergency.