Thread

Banks and Credit Unions to Team Up Against Apple Pay Fees

127 points · 133 comments · Brajeshwar

havaloc · 1790442549 · focus · HN ↗
I get why the banks are not happy, but I can tell them that I am not going to use Chase Wallet, Bank of America Wallet, Citi Wallet...just pay the fee and be thankful for the reduced payment friction, which they invariably make money from. PS: Nobody is going to use Paze (yet another half baked wallet), other than to collect the free $10 to sign up for it.
Somewhat related, even Walmart relented and now supports Apple Pay/Contactless. Every big merchant has now relented (Kroger, Home Depot, Walmart).
1. kotaKat · 1790442861 · focus · HN ↗
  Walmart only relented because they finally broke through the final missing link of the contactless issue. They got customers conned into giving their phone numbers at checkout, just like it's the grocery store.
  Cards get linked to accounts automatically behind the scenes based on first6/last4 card number tracking, then everyone else self-selects to punch their phone number on the screen.
  Same reason Walmart Radio is such gruesome auditory cancer, it's part of the data collection and advertising vehicle.
  1. havaloc · 1790443253 · focus · HN ↗
    That could be part of the reason, but also I think insisting on chip all this time just really slows down a store that doesn't really spend on cashiering all that much. Tap to pay can shave off a few seconds on every transaction (ever been behind someone in the store who finally pulls out their wallet, finds the business end of their card, inserts it, waits 20 seconds...).
    Millions of transactions a day, over thousands of stores, it can make a huge difference in time saved.
    massysett · 1790451117 · focus · HN ↗
    This is even worse now that tap to pay has proliferated. Customers who are not Walmart regulars (and some that are) will wave their credit card, phone, or watch over the terminal and wonder why it’s not working.
    Cashier must explain: No tap. Best case is the customer shrugs and inserts card. Bad case is the customer is confused or argues about it. Horrible case is that the customer must fish through his belongings for a credit card or cash and takes minutes to realize he has neither.
    I guess Walmart figured that these scenes repeating daily was not worth whatever its strategy was.
    AnthonyMouse · 1790456018 · focus · HN ↗
    > Tap to pay can shave off a few seconds on every transaction
    I don't really get how this can be possible. A person can definitely get their card out of their wallet in less time than it takes the cashier to finish scanning their items.
    Obviously if the customer is confused then it can take arbitrarily long, but how is a phone less confusing than a card? People don't get to the register only to realize that their card's battery is run down or it's the first time they've used a phone for payments and then they want to stand there for 15 minutes in front of you trying to set it up.
2. wmf · 1790443204 · focus · HN ↗
  A possible compromise is to allow Apple Pay to be a monopoly as long as it doesn't charge any fees.
  1. braiamp · 1790447972 · focus · HN ↗
    How about I do you one better compromise: create a payment network that don't rely on private institutions rent seeking behavior, like Pix in Brazil.
    dd8601fn · 1790464419 · focus · HN ↗
    How about Chase continues to eat shit on that 0.15% extra profit they really want to capture, but aren’t owed… and everyone else goes on with their day?
    braiamp · 1790500186 · focus · HN ↗
    I don't know how your solution makes any sense considering that I'm denying everyone rent seeking behavior
3. caycep · 1790443517 · focus · HN ↗
  granted i am a bit of schadenfreude at the thought of poor poor megabanks having to pay....fees...
  1. otterley · 1790443828 · focus · HN ↗
    Ultimately it comes out of their customers’ wallets.
    wasm777 · 1790443849 · focus · HN ↗
    [dead]
    dijit · 1790451259 · focus · HN ↗
    Probably, but there is an upper limit on what people will be able to tolerate, everyone is aware of it and capitalism is trying to make products that meet it.
    So, it’s not unlimited cost here.
    The fact right now is that handling cash is more expensive than handling card- even with the fees, which is why Sweden, Estonia etc; are essentially cash-free countries.
    At some point the fee’s will make you break-even I guess?
4. HotGarbage · 1790444376 · focus · HN ↗
  I would use my non-profit credit union Wallet if it meant less fees on their end.
5. syvolt · 1790444937 · focus · HN ↗
  Or Apple Pay can just be like Google Wallet is on Android? The alternative is not multiple apps.
  1. juiceland · 1790447283 · focus · HN ↗
    How does it work on Google Wallet?
    sgerenser · 1790448508 · focus · HN ↗
    Article says Google wallet works just like Apple Pay, except they don’t charge a 0.15% fee.
    ericmay · 1790455152 · focus · HN ↗
    Why shouldn’t Apple be able to make money for the service they created?
    Muximize · 1790457426 · focus · HN ↗
    A service for whom? It has already been paid for by the users when they bought the iPhone.
    ericmay · 1790457471 · focus · HN ↗
    Users aren’t paying the fee though
    Muximize · 1790458847 · focus · HN ↗
    Of course they are, passed on as increased prices for everyone, which is exactly the problem. Sure the banks here would like these fees gone, but it also hurts society in general.
    ericmay · 1790465394 · focus · HN ↗
    That’s true of any cost that any company pays for any service.
    hdgvhicv · 1790473417 · focus · HN ↗
    And customer are also paying cash handling fees, which in the U.K. at higher than card handling fees.
    Companies that prefer or only take cash tend to do it for tax evasion rather than cost purposes.
    U.K. fees tend to be about 1-1.5% all in, for cash or card (excluding cost of employee taking cash to bank). Things like pix, net, grocers about 0.5-1%. Nets QR is cheaper than Nets rfid.
    Dylan16807 · 1790457819 · focus · HN ↗
    The phone holds on to a credit card number and some extra information. What service is happening here? Is Apple doing something meaningful every payment?
    juiceland · 1790459356 · focus · HN ↗
    The phone doesn't store your card number. Apple brokers a token at setup, secures it on-device, and manages it afterward (suspend, re-issue).
    Dylan16807 · 1790462417 · focus · HN ↗
    So it doesn't generate a second card number like other things I've used?
    But anyway it sounds like the answer to my question is no, Apple is not doing anything meaningful per payment. They play a role in setting up a card and that's it. Is that accurate?
    juiceland · 1790463587 · focus · HN ↗
    When you add a card, your bank creates a device-specific Device Account Number, encrypts it, and sends it to Apple w/ a key used to generate a unique sec code for each transaction.
    Dylan16807 · 1790464330 · focus · HN ↗
    And is that information stored on the phone? Do Apple's servers need to be running for me to make a purchase?
    juiceland · 1790473184 · focus · HN ↗
    Not if you're tapping in a store. Apple's servers re-encrypt the payment data for specific merchants if you buy in an app or on a website. Apple brokers requests for adding a card, or suspending one via Find My, or setting one up again whenever a person changes phones.
    juiceland · 1790459069 · focus · HN ↗
    Do you mean this part?
    > It points to Google's Android, which supports multiple wallets and does not collect a fee from card issuers for contactless payments. It suggests Apple would not be able to continue to charge "substantial fees" if it were forced to support other mobile wallets on Apple devices.
    This described supporting multiple wallets, which I don’t care about. I don’t want multiple wallets, I want one wallet.
    [deleted] · 1790464198 · focus · HN ↗
    [deleted]
    sgerenser · 1790466455 · focus · HN ↗
    Android supporting multiple wallets isn’t a feature of Google Pay, it’s a feature of Android. Although the implication in the article is that Google not being able to charge the fee is a side effect of any app being able to act as a “wallet.” Which I’m not 100% sure is true.
  2. shreddit · 1790447344 · focus · HN ↗
    There is already apple wallet where i can put any of my banking cards…
    ValentineC · 1790455143 · focus · HN ↗
    Not "any". The bank themselves need to partner with Apple Pay and presumably pay Apple the percentage cut from the article.
    fsckboy · 1790463211 · focus · HN ↗
    if apple wallet works on android and I have a choice, that's competititon
    if apple wallet requires apple phone, and google wallet require android phone, that not competition.
    competition is good. no competition should be regulated out of existence.
  3. kelvinjps10 · 1790447901 · focus · HN ↗
    I have used both but I dont know the difference
  4. add-sub-mul-div · 1790448179 · focus · HN ↗
    Another alternative (in the US, at least) is tapping a piece of plastic instead of your phone and not inviting any of the tech giants into your transactions at all. What an unforced error, to shovel more of your data at them needlessly.
    Elfener · 1790448444 · focus · HN ↗
    That is much better, but you're still paying visa/mastercard some percentage fee for a service which should be provided by e.g. the central bank.
    MBCook · 1790451957 · focus · HN ↗
    Yeah. But this is the US. This is all we’ve got. Having the central bank do it would be communism, and that’s bad. I learned about it from Saturday morning cartoons.
    AnthonyMouse · 1790454691 · focus · HN ↗
    Ironically it's the central bank (and associated regulations) that cause these intermediaries to exist to begin with.
    A protocol to support decentralized payments is a hobby project for an individual. You give each institution an identifier (e.g. their domain name) and each institution gives each customer an account number. If you're account 123 at Chase then you sign in as #123@chase.com, tell Chase you want to send $5 to #456@bankofamerica.com, they send the money and Bank of America tells their customer they have a new deposit. If you want to collect money from someone, you tell your bank to send their bank a payment request and they can either approve it manually (e.g. so you can deliver the goods for a one-time purchase) or configure some rules for which accounts get approved automatically up to some threshold amount (e.g. for recurring payments). Also no reason for banks in different countries not to all support the same protocol.
    That doesn't require a central bank or any centralized third party payments intermediary. All it requires is for banks to know how to send money to other banks, which they obviously already do and the specific implementation of that isn't even relevant to the customer-facing payments protocol. So how does this not exist? It can't be that no one wants it, so it's got to be that someone (e.g. Visa/MasterCard) doesn't want it.
    fragmede · 1790455346 · focus · HN ↗
    The banks all got together and created Zelle, so it exists. No Visa/Mastercard conspiracy needed.
    AnthonyMouse · 1790456278 · focus · HN ↗
    Zelle is an app rather than a protocol, which is why e.g. PoS terminals and web checkouts don't support it.
    notpushkin · 1790457324 · focus · HN ↗
    Zelle, from my understanding, is a “protocol” – many banks support it in their own apps. (Scare quotes because I’m not entirely sure it’s a proper well-defined protocol.)
    And there’s nothing preventing PoS from supporting individual wallet apps – see e.g. WeChat Pay / Alipay in China. (Alipay+ is also a “protocol”, i.e. other banks and wallets support it.)
    AnthonyMouse · 1790491623 · focus · HN ↗
    What I mean by protocol is that there is an RFC or equivalent and anyone who implements the spec and has a bank account can then talk to their bank using the standardized protocol. If that exists for Zelle then where's the spec?
    notpushkin · 1790494791 · focus · HN ↗
    I’ve searched for ‘zelle spec’ and came across this line:
    > Zelle® is available in over 2,400 banking and credit union apps.
    so I’m pretty sure there is a spec because there is no way in hell this many banks are using ad-hoc protocols to talk to each other and/or a centralized system. But yeah, I don’t see anything published.
    Chances are it’s something ISO 20022-ish. (Either that or an Excel spreadsheet.) Speaking of which...
    > and has a bank account can then talk to their bank using the standardized protocol
    ...if you’re a big enough business, you probably can also speak ISO 20022 to your bank. If you want it on your personal account however, well, that makes two of us, but from practical standpoint what I care more about is that I can punch in an account number and send money near instantly, which Zelle seems to provide in the US (but I have to make do with whatever Wise provides, probably regular ACH judging by speeds).
    fragmede · 1790545239 · focus · HN ↗
    <a href="https://api.payments.jackhenry.com/docs/zelle/overview/" rel="nofollow">https://api.payments.jackhenry.com/docs/zelle/overview/ Is a white label api that you, as a bank, can implement/hit. Just like your local small business vendor can choose to also take Venmo and CashApp, they can also choose to take Zelle. I've bought a burrito with Zelle before.
    AnthonyMouse · 1790760824 · focus · HN ↗
    That seems to be the protocol that banks use to talk to other banks. The missing piece is the protocol for merchants to use to talk to their own bank (regardless of which bank it is), so that support can be added into generic point of sale terminals or web shopping carts etc.
    Having the merchant manually process every payment using the bank-specific app on their personal phone isn't it.
    notpushkin · 1790772657 · focus · HN ↗
    > so that support can be added into generic point of sale terminals or web shopping carts etc
    We don’t have a single protocol for acquiring (online) card payments either, and this hasn’t been an issue. Everything just uses plugins or custom integrations.
    Not sure about in-person payments. From my experience, banks program their own firmware into the terminal, but it may support some standardized API over USB / Serial. Even then, any given bank can implement some subset of features, and supports only a bunch of models (so if you decide to switch banks and your terminal isn’t “blessed”, you’ll have to buy a new one; thankfully, they’re fairly cheap used).
    It’d be nice to have a unified protocol for all payment types IMO, but I’m not sure that’s realistic. Some Chinese payment processors have something like that, with a couple Alipay gateways emulating one protocol established by another gateway, so you can just swap out the API endpoint in case you want to switch. But even that’s just for the simplest case (you have to redirect the user to the processor’s page).
    expedition32 · 1790455646 · focus · HN ↗
    Banks in the Netherlands used to have their own system for 30 years. It was free. It worked.
    But it was too much work and didn't make the banks money so now we are also left to the American Visa parasite.
    jasode · 1790450329 · focus · HN ↗
    > is tapping a piece of plastic instead of your phone and not inviting any of the tech giants into your transactions at all.
    Apple doesn't see individual transactions when Apple Pay is used at retail stores' tap-to-pay terminals. The secret card payment token is sent from the phone to the credit-card's issuing bank and bypasses Apple servers. In this way, using Apple Pay is more secure and private than plastic cards because the real card number details remains hidden from the merchant.
    The iPhone does contact Apple servers to add a new card to the digital wallet. Apple servers then contacts the issuing bank to get the secret token the bank generates and then puts it in the digital wallet. Conceivably, the "add a new card to digital wallet" could also have been done without Apple in the middle but it would require a much more convoluted, less secure, and more user-hostile workflow to do it. (e.g. the end user would have to know what bank endpoint to contact, manually enter the long and cryptic digits of the secret token, or maybe scan a QR code on a computer screen that's vulnerable to interception and phishing.)
    bdangubic · 1790450444 · focus · HN ↗
    don’t be silly, apple displays me exact amount on the screen, in plain fucking text, after each transaction - that’s crazy you wrote this
    tekla · 1790450788 · focus · HN ↗
    Man, its amazing how confident you are about this, considering I know individual people who independently work at Visa, Mastercard, AND Apple, who have worked on mobile payments who independently confirm that none of them know any personal info and that its all pass-through.
    So, are you sure you know what you are talking about?
    ssl-3 · 1790453321 · focus · HN ↗
    This kind of appeal to authority [believe me because I say so!] doesn't really add much information, does it?
    The report, above, is that previous transactions are visible within Apple's payment app. Apple agrees[1]. I'm willing to accept that this observation is based on reality and that it is reported in good faith.
    Meanwhile, the suggestion is that Apple has no knowledge of transaction history.
    Is there a way in which these two seemingly-conflicting concepts can be constructively combined into an understandable whole?
    [1]: <a href="https://support.apple.com/en-us/104954" rel="nofollow">https://support.apple.com/en-us/104954
    (For my part, I've never used Apple Pay and it's possible that I never will. I do not have a dog in this race.)
    epistasis · 1790454088 · focus · HN ↗
    This is baffling, there's all sorts of information on my phone that Apple has zero knowledge of, why would the transactions be different?
    Do you think Apple has complete copies of everything? I don't understand where this supposed contradiction is supposed to exist, unless you think that Apple has complete knowledge of all phone contents, which would require complete ignorance of the entire platform.
    ssl-3 · 1790455787 · focus · HN ↗
    > This is baffling, there's all sorts of information on my phone that Apple has zero knowledge of, why would the transactions be different?
    It's kind of unique. It involves finances, and reporting transactions, and it involves their app with their branding that runs on hardware that they unilaterally control. They apparently even take cut from the middle of each of these transaction.
    If Apple does all of this with zero knowledge, then I am willing to accept accept that...
    > Do you think Apple has complete copies of everything? I don't understand where this supposed contradiction is supposed to exist, unless you think that Apple has complete knowledge of all phone contents, which would require complete ignorance of the entire platform.
    ...but I'll only accept it if the functional operation can be explained.
    This kind of non-explanatory browbeating doesn't further my understanding of anything at all. I have never endeavored to undertake a faith-based approach to understanding technology, and I'm certainly not going to begin doing so today.
    bdangubic · 1790462548 · focus · HN ↗
    people will people :-)
    deltaknight · 1790452580 · focus · HN ↗
    This information comes from the card issuer directly, after the transaction has completed. It usually requires the mobile banking app to be installed.
    The wallet app has a way to get the information, but it’s not from the tap itself. The tap interaction is not able to provide this information back to the phone (because the transaction auth happens long after the tap interaction completes).
    Taps are designed to work with fully offline devices (which is why you can tap a plastic card, it is powered by the card terminal for the duration of the tap only, and requires no online interaction)
    bdangubic · 1790462751 · focus · HN ↗
    > This information comes from the card issuer directly, after the transaction has completed. It usually requires the mobile banking app to be installed.
    except of course it fucking doesn’t, I don’t have Chase or Amex apps on my phone… and yet my transactions are on my phone and watch and in a list inside my “wallet” and probably in the phone settings somewhere as well :)
    [deleted] · 1790465904 · focus · HN ↗
    [deleted]
    cosmic_cheese · 1790451206 · focus · HN ↗
    Importantly, this provides a degree of protection from compromised PoS terminals. Ever since I switched to nearly exclusively using Apple Pay for physical shopping I’ve had no unauthorized charges, whereas back when I was still tapping, inserting, or swiping my card I’d need to call and get a card or two replaced almost every year.
    MBCook · 1790451832 · focus · HN ↗
    Inserting and tapping is just as safe.
    Swiping is where the risk is.
    mrpippy · 1790453440 · focus · HN ↗
    Or (common in the US) handing your card to a restaurant waiter who walks off with it to do the charge
    ericmay · 1790455414 · focus · HN ↗
    I’m not super familiar with the implementation details but wouldn’t inserting not be as safe since there’s a physical connection?
    With tapping I could see how that is more secure but if they’re still providing the card details versus the secure token or something well… maybe it’s not?
    notpushkin · 1790456839 · focus · HN ↗
    Inserting and tapping is mostly the same process, apart from the physical layer of the protocol (NFC vs interfacing the chip directly).
    Unless there’s a hidden magnetic reader in the chip-reading portion of the terminal, in which case the scammers could read like 1/3 of the magstripe data? Which doesn’t seem that useful tbh.
    ssl-3 · 1790461040 · focus · HN ↗
    > Unless there’s a hidden magnetic reader in the chip-reading portion of the terminal, in which case the scammers could read like 1/3 of the magstripe data? Which doesn’t seem that useful tbh.
    At least around where I am (Ohio, USA), at gas pumps and ATMs: Inserting the card for contact EMV typically means inserting the whole card.
    In doing so, entire card is pushed all the way into the same slot that is also used for reading the magstripe, and to the same depth that is used for magstripe transactions.
    This quality leaves the door open for magstripe skimming.
    (It may be a stupid way of building things, but things exist in the real world that are built this way anyhow. Whether the information on the mag stripe still has any utility for a would-be thief in 2026 is a different matter.)
    MBCook · 1790462886 · focus · HN ↗
    The credit cards, I believe, have pledged to eliminate magnetic stripes. Although given how long it takes us to do anything for all I know that will be by 2060. They are also planning to extend credit cards past 16 digits, which may also require the magstripe to go away.
    notpushkin · 1790495986 · focus · HN ↗
    > at gas pumps and ATMs: Inserting the card for contact EMV typically means inserting the whole card.
    Fairly standard for ATMs, yeah. I’ve always wondered why they do it like that.
    And I think I’ve seen ticket machines like this in Finland – not a typical ATM-like receptacle, but you do insert the card all the way in and it locks it down. (I guess Ohio gas pumps also have something like that?)
    So yeah, those things exist, but the “typical” terminal style where you only insert the card halfway is fairly safe at least. :-)
    tialaramex · 1790458423 · focus · HN ↗
    Physical connection doesn't matter. This isn't a Hollywood movie, there isn't some mega-virus which magically seizes controls of trivial objects by passing through a connector.
    All three modern technologies ("original" Chip & PIN, wireless or a phone) are basically the EMV protocol, which is a fairly crap protocol which wasn't reviewed by experts before deployment - but is at least designed by people who have heard about cryptographic security and wanted to do that.
    The original credit cards are just numbers written on a card. Clerk sees your number, memorizes it, now they can make arbitrary transactions indistinguishable from yours. Basically no security.
    Magnetic stripe cards look more sophisticated but the stripe is basically the same numbers again but in a way humans cannot read. "Cloning" is just a matter of a machine copying those numbers onto another card's magnetic stripe. There's no real security improvement, though it is more convenient for the bank...
    EMV ("Chip and PIN") is rather more complicated and could in principle be entirely secure - they could make it implausibly expensive to "clone" an EMV card, and require that you actually know your PIN for every transaction, so then crooks would need to learn your PIN and have the actual card, and that's a high bar.
    In practice we didn't do much of that because it would be inconvenient, and so there are technical deficiencies, but realistically that XKCD "wrench" thing applies. Difficult technological attacks rarely happen, crooks threaten to stab you if you don't co-operate or they break into your home and steal your stuff, they do not come up with breakthrough cryptanalytic attacks on protocols. Mostly.
    MBCook · 1790463082 · focus · HN ↗
    There are two forms of wireless. The first was “magstripe emulation” and it’s exactly what you think it is. The card would hand over the exact data on the magstripe.
    It’s also exactly as secure as you think: it’s not.
    That hasn’t been used for a long time, and I don’t even think people accept it anymore. May not have for years. At least for credit cards. It’s quite possible that’s still how door access cards or maybe gym membership cards work. I don’t really know.
    Everything now and for many, many many years, has been EMV over NFC. And you’re right on that one it is essentially identical to sticking your card in the EMV reader.
    tialaramex · 1790467649 · focus · HN ↗
    The exact technologies used for "access cards" have varied over the years, but last time I checked most of them still aren't doing anything even vaguely secure. The card says "I'm card 1234-5678" and the access system checks that is on the list, welcome in. Like magnetic stripes it isn't obvious to the human operator, but just like magnetic stripes you can just clone it by listening and reciting the same, "I'm card 1234-5678".
    Now to be fair, you'd often find these systems are so clumsily installed that you don't need to clone a card anyway, the out-of-hours access has an "emergency" generic key you can buy from a hardware store, the controller was placed on the wrong side of the door - that sort of thing. But even a well-installed system is typically vulnerable to a competent intruder.
    ValentineC · 1790455260 · focus · HN ↗
    > Ever since I switched to nearly exclusively using Apple Pay for physical shopping I’ve had no unauthorized charges
    BIN attacks [1] are still a thing. Your banks are probably just better at blocking them.
    [1] <a href="https://stripe.com/en-sg/resources/more/what-are-bin-attacks-heres-what-businesses-should-know" rel="nofollow">https://stripe.com/en-sg/resources/more/what-are-bin-attacks...
    MBCook · 1790451803 · focus · HN ↗
    All EMV transactions (including Apple Pay in a tap to pay scenario) don’t give the retailer the full card number.
    fsckboy · 1790532100 · focus · HN ↗
    >Apple doesn't see individual transactions when Apple Pay is used at retail stores' tap-to-pay terminals.
    when I added my credit card to ApplePay, transactions made with the bare card would show up on my phone even though the phone was not involved: you're saying my phone has access to that transaction and Apple does not?
    bdangubic · 1790450369 · focus · HN ↗
    yea, feels like tech giants do not have access to this already? they know where you are and what you do every second of every day, keeping away from ( while they know I was a target ) what was the amount on my receipt is really giving it to them :)
6. Despegar · 1790445545 · focus · HN ↗
  Now do developers.
  I don't really care about any of Apple's business partners being upset about their business terms with Apple. Developers want a bigger cut, banks want a bigger cut, Foxconn wants a bigger cut.
  My interests as an Apple user are aligned with Apple. But even if I wasn't an Apple user, market forces determine what the "fair" cut is for everyone.
7. radialstub · 1790448131 · focus · HN ↗
  This is the government's problem. I tend to be on the side of less government, but it is so obvious that payment facilitation should be a service provided by the government. The government is just allowing corporations to collect rents, because they are lazy and incompetent.
  1. guywithahat · 1790448728 · focus · HN ↗
    It's not a government problem, it's a competition problem. Fundamentally 1-3% is actually a very competitive rate for organizing the easy transfer of money and handling fraud. Merchants would rather the cost be free, and banks may want a larger slice of the pie, but until someone comes up with a better way of paying money for both sides this is the best we have. If government got involved all that could happen is fees would increase and then we'd miss out on future efficiency improvements and savings.
    MBCook · 1790452003 · focus · HN ↗
    0% because it’s a service that’s so obviously should be provided by the government is better.
    coredog64 · 1790458080 · focus · HN ↗
    Having been a customer of a government run postal bank, I'm going to hard disagree.
    stevesimmons · 1790452306 · focus · HN ↗
    > Fundamentally 1-3% is actually a very competitive rate for organizing the easy transfer of money and handling fraud
    This is a very US-centric take. In the UK, EU and Australia, interchange rates are capped at more like 0.2/0.3%.
    gruez · 1790452667 · focus · HN ↗
    That actually proves the point, because a market left to itself arrives at 2-3%, and it only goes lower if the government is dictating a rate.
    Flimm · 1790455692 · focus · HN ↗
    What you are missing is that a market left to itself is not necessarily competitive when monopolies/duopolies form.
    Dylan16807 · 1790457513 · focus · HN ↗
    Proves what point? GP was saying the government would only increase fees.
    overfeed · 1790466006 · focus · HN ↗
    A duopoly is not "a market"
    wenc · 1790469920 · focus · HN ↗
    There are distortions in that "market" because credit cards aren't just for payment acceptance and fraud handling (which are narrow functions).
    In the U.S., many credit cards bundle short term credit, rewards, travel benefits, insurance etc. This bundling is why merchants can pay up to 2-3% in fees.
    The payment clearance and settlement parts are much cheaper. That's why many countries are able to build domestic payment rails (e.g. Pix in Brazil) that process transactions at low cost.
    PaulCarrack · 1790510450 · focus · HN ↗
    A 2% cash back card cancels this out, resulting in comparable interchange rates. In some cases, you can effectively make money by spending money.
    93po · 1790467342 · focus · HN ↗
    The USPS is overwhelmingly the most efficient and inexpensive way to ship things. Try sending a letter cross country with UPS - it costs $15. USPS costs $0.50.
    Government doesn't always mean worse.
    stasomatic · 1790511472 · focus · HN ↗
    The USPS lost $9B last year. If our government considered The USPS a real public good, they would pick up the bill and give them more budget. Instead, The USPS had to get in bed with Amazon to keep the lights on and start delivering on Sundays.
    93po · 1790623290 · focus · HN ↗
    It was $2.7 if you remove the forced retirement obligations that private companies don't have to do, which is only about 3% shortfall. And a large part of that was also due to private competition taking more of the market - in part because the USPS isn't as competitive as it could be, again because of costs incurred outside its control.
    Certain individuals, such as Susan Collins and Tom Davis, who were the largest names behind the 2006 law to force this on the USPS, were clearly doing it in an attempt to make the USPS fail/become less competitive. PACs affiliated with FedEx, UPS, etc gave more than $192,000 to Collins’s campaign / PAC from 2000 to 2004. FedEx’s PAC has given Collins more donations than any other congressional candidate in that PAC's history.
    There is a huge chain of evidence suggesting members of congress don't want the USPS to succeed due to self interest.
    votepaunchy · 1790678380 · focus · HN ↗
    Do private companies not have these “forced retirement obligations “ because they don’t offer fixed benefit pensions?
    stasomatic · 1790703008 · focus · HN ↗
    I am out of my depth here. $2.7 is not nothing, but $9B is still on the books, no? No ifs and buts about it, unless our government does the right thing. Just eat the cost and prop them up, treat your federal employees right. It's really bizarre that the government expects them to turn a profit.
    Tangent, having lived in 5 states, the USPS workers have always been nice and courteous, even when there are lines out the door during the tax season. And in general, like DMV or other licensing agencies.
    nateb2022 · 1790612371 · focus · HN ↗
    > then we'd miss out on future efficiency improvements and savings.
    Which I'm hoping will find its way back to our wallets but which I doubt will happen
  2. bnjms · 1790451828 · focus · HN ↗
    They’re more like taxes than rents. It’s a constant cost applied to all goods because of the ubiquity of use means we pay with or without playing the credit card/payments game.
  3. AnthonyMouse · 1790455278 · focus · HN ↗
    This is fundamentally looking at it the wrong way.
    Why do we need my bank to send money to your bank via Visa or the Federal Reserve or any such thing, instead of having my bank send money directly to your bank? All they need to do is both support the same openly specified protocol for transferring money.
    rietta · 1790457284 · focus · HN ↗
    We used to call those checks!
    havaloc · 1790457930 · focus · HN ↗
    Listen to the Visa episode of The Acquired Podcast, and you'll change your mind.
    AnthonyMouse · 1790494886 · focus · HN ↗
    If you have an open standard decentralized protocol that banks are required to support, that's the network effect solved. Merchants and anyone making the software that merchants use would want to support it because you're getting rid of Visa's fees.
    owebmaster · 1790464516 · focus · HN ↗
    That's what Brazilian pix does and the reason visa/Mastercard and the US government want to kill it
    hdgvhicv · 1790472573 · focus · HN ↗
    Most counties have such a system, many are more advanced than visa etc (seemless customer-customer payments too for example.
    From NETs in singapore to girocard in Germany, Alipay to UPI.
    ValentineC · 1790520150 · focus · HN ↗
    > From NETs in singapore to girocard in Germany, Alipay to UPI.
    Singaporean here. NETS is a shitshow of a dinosaur trying to stay relevant. They started as more of a debit card system like EFTPOS [1], but now lean more into merchant acceptance for both credit cards and QR codes. (Singapore is huge about credit card rewards, so few people want to use a debit card with PIN entry and no rewards these days.)
    I think the problem with them, and many companies that focus solely on a tiny market like Singapore, is that their organisations tend to be full of comfortable dinosaurs that don't stay up to date with financial software engineering practices (I've lost money from government site transactions that were a hassle to get back), and there's a captive market because of their duopoly.
    The biggest reasons they still exist are because they're a joint venture between the big 3 local banks, and our government likes their initiatives to have some competition to emulate a free market.
    Pix, from its Wikipedia page, sounds like a bank account aliasing system, just like PayNow in Singapore.
    [1] <a href="https://en.wikipedia.org/wiki/EFTPOS" rel="nofollow">https://en.wikipedia.org/wiki/EFTPOS
    SkiFire13 · 1790494336 · focus · HN ↗
    See "What do Visa and Mastercard do?" <a href="https://news.ycombinator.com/item?id=49614280">https://news.ycombinator.com/item?id=49614280
    It's not something irreplaceable but it's not trivial either.
    AnthonyMouse · 1790530019 · focus · HN ↗
    The "network" part of what they do could straightforwardly be done in a decentralized way using ordinary DNS (for the parties to discover the servers of the others) and TLS. When your card issuer is Example Bank then your "card number" would be 123@example.com and the merchant or their bank knows to contact the servers at example.com to initiate a transaction for that card.
    It seems like the primary thing they actually do is currency conversion, which a) isn't strictly required (e.g. plenty of small US merchants might hardly notice if they only accepted payment in US dollars), and b) could just as easily be transparently provided as an optional service by either of the card issuing bank or the merchant bank for cardholders or merchants who expect a non-trivial number of foreign currency transactions.
8. MBCook · 1790451692 · focus · HN ↗
  Remember CurrenC? The thing a bunch of them tried to make that failed horribly during test with no consumers liking it? If I remember a description it involved using an app where you had to scan a QR code, and then the point of sale terminal had to scan a QR code on your phone or something like that.
  It was all so hilariously badly designed compared to tap and pay.
  1. kstrauser · 1790460725 · focus · HN ↗
    I took great joy in watching its downfall. It also only worked with debit cards, meaning you didn’t get the buyer protections you use from buying things on a credit card.
    CurrentC was designed to collect all your transaction info so that its owners could analyze your buying habits. I’m delighted that not-CurrentC won that war.
    (I personally use Apple Pay, but my understanding is that Google Pay has the same privacy advantages for end users. Both of them are light years ahead of the other boondoggle.)
    MBCook · 1790463261 · focus · HN ↗
    Yeah, but it meant they didn’t have to pay credit card fees. And isn’t that what’s really the most important thing here? Lol.
    As far as I know, the current Google Pay is identical to Apple Pay: it’s just EMV tap-to-pay. So it would be the same protections. Samsung pay too.
    It was kind of neat that Samsung had that thing for a short while that would somehow trick the magstripe reader in a POS terminal by blasting magnetic fields at it to think that you had swiped your card.
    I think there was a different one before that that was not, but I’m also pretty sure that’s long gone. And I think it was more like Apple Pay on the web, where it was really for paying in a non-card environment. But I’m not an android person, so I’m not sure.
9. grafmax · 1790452065 · focus · HN ↗
  Another argument for turning finance into a public utility. Instead we have different factions of rentier capital competing for who gets to parasitize us.
  1. gruez · 1790452554 · focus · HN ↗
    >Another argument for turning finance into a public utility
    There already is a public option in the US, FedNow. In EU there's SEPA instant.
    grafmax · 1790453072 · focus · HN ↗
    Not quite. FedNow is public payment infrastructure for institutions. Apple Pay is consumer-facing.
10. Brian_K_White · 1790457502 · focus · HN ↗
  "My short term convenience trumps all" is why everything sucks and we have far worse short and long term convenience and efficiency in everything. Thanks for that.
  I won't use $bank-wallet either but that's a seperate issue which is that the bank is not really any better than Apple or PayPal or anyone else. The only reason they "fight" Apple tax is because they want to do $bank tax.
11. Scoundreller · 1790486685 · focus · HN ↗
  > Somewhat related, even Walmart relented and now supports Apple Pay/Contactless.
  Walmart USA.
  Walmart Canada allowed contactless pretty much from the start over a decade ago
  Always confused me on trips to USA when I’d have to insert a card

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