Thread

1. carlosjobim · 1790944813 · focus · HN ↗

   And the benefits for users would be?

   1. asimpletune · 1790945273 · focus · HN ↗

      Probably lower prices since there’s competition between payment processors

      1. carlosjobim · 1790945587 · focus · HN ↗

         There's already competition between payment processors, and not lower prices.

         1. furst-blumier · 1790945946 · focus · HN ↗

            Isn't it actually "competition" in the visa/mastercard case?

            1. carlosjobim · 1790947341 · focus · HN ↗

               There are many other options already besides Visa and Mastercard. What I'm asking and nobody wants to answer is what the benefits for users are. The first thing you should think about when making a new product or service.

               People are only answering me here with benefits for European politicians and their sovereignty. That's alright. But what I'm asking about is benefits for the users.

               For example, Visa and Mastercard offer fraud protection to the users, and many card emitters offer cashback to their users. Can this new European system offer this? If not, why not? Can they offer something else which benefits the user over current providers?

               1. rswail · 1790949810 · focus · HN ↗

                  There are not many other options already besides Visa/MC for their payment network, not the branding. Interbank account transfers with instant settlement are clumsy.

                  The change is that newer financial systems, using ISO20022, run at bank level, allow instant net settlement between individual accounts, not just settlement at the bank level.

                  So the benefits to merchants/customers compared to Visa/MC:

                  Merchants

                  * Interchange is much cheaper, because the banks transact via the central clearing house which is usually sponsored by the country's reserve bank

                  * It allows for the merchant to set up direct debit payment structures that allow for things like subscriptions and other payments to be made with similar network and transaction fee savings

                  * It has all of the advantages of EFT and CC payments

                  * It can use QR codes, email addresses, and mobile numbers as identifiers, so it is much easier to pass on payment details. Merchants can operate with just a printed QR code, verifying payment on the customer's mobile.

                  Customers

                  * Banks can offer all of the same "perks" of credit cards, like lines of credit, branding, account holder offers.

                  * They can offer things like product insurance and return protection and similar consumer protections.

                  The "rails" are much cheaper to run and suits a 21st century financial system and is easier and more secure for consumers.

                  1. maratc · 1790952884 · focus · HN ↗

                     What banks "can offer" is irrelevant until they offer it in practice.

                     As a customer, I have zero interest in paying for my lunch via "QR codes, email addresses, and mobile numbers" when I can do it with near-zero friction with a double-click on a phone (funded by a credit card), or with a tap or swipe of the credit card. I also have better protections. Switching costs are non-zero and I will only switch if there are some substantial benefits; pure "feature parity" is a reason to not switch.

                     The benefits to merchants are tangential to me, but there is a substantial downside of all the merchants having to do integration with an additional system.

                     1. rswail · 1790960411 · focus · HN ↗

                        These systems have been rolling out across Asia and EU and other places.

                        If CCs were the system of the last 75 years to allow quick transactions, these systems are the next generation.

                        The US is a specific banking market that has a very embedded structure, regulation, and players. Other nations have a more flexible financial system that allows for services to develop that are better than the existing Visa/MC duopoly.

                        This is just the next step of allowing them to operate cross-border/jurisdiction.

                        The fact that you have zero interest does not mean there are many small merchants and customers that find the ability to easily transfer money instantly with very low fees and the same safety as cash is a very useful service.

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