Thread

1. 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. 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.

         1. 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%.

            1. 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.

               1. Flimm · 1790455692 · focus · HN ↗

                  What you are missing is that a market left to itself is not necessarily competitive when monopolies/duopolies form.
               2. Dylan16807 · 1790457513 · focus · HN ↗

                  Proves what point? GP was saying the government would only increase fees.
               3. overfeed · 1790466006 · focus · HN ↗

                  A duopoly is not "a market"
               4. 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.

            2. 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.

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