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Comment by kuschku | Hacker News Reader

It's sad that this duopoly is controlling so much of the market, especially that merchants can't make customers pay the fees (in which case mastercard and visa would quickly lose their market share).

Especially considering that many european countries such as Germany had (and have) independent systems with often orders of magnitudes lower fees, faster transaction times and more safety and security.

I'd rather see girocard become a monopoly on the european market than to see this mastercard/visa monopoly continue.

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Nowadays credit and debit card fees are limited by the EU. Around 0.3% per transaction. A 10x reduction to before. Since then adoption of credit card payment has spread widely in German supermarkets.

That limit is on the interchange fee, not what the merchant pays their payment processor, which is still significantly higher.

Good to know. Then i am still wondering why there seems to be wider adoption of CC in Germany. Or maybe we are only reaching the CC adoption that other EU countries have already seen a long time ago...

Germany is still nowhere close to what's common in other EU countries. Pretty much all Germany's neighbors have much higher adoption of terminals accepting MC/Visa.

> ... especially that merchants can't make customers pay the fees ...

Why not? Is that due to contract terms that prevent you from charging more for card transactions vs other payment methods?

I vaguely remember clauses like that were recently thrown out in the USA. I’d imagine the EU would be even more consumer friendly.

Anecdotally, I see lots of small businesses in the US which explicitly charge slightly more for credit card transactions.

This is extremely common at gas stations and coffee shops, for example.

Sometimes that is actually the business charging slightly less for cash transactions rather than charging slightly more for credit card transactions.

What's the difference? If the business advertises both a cash price and a credit card price, then there is effectively no difference I believe whether you characterize it is a discount for cash or a surcharge for credit cards.

However, if you only advertise one price, then its a surcharge if that is the cash price and you add extra for credit cards at the register. If the one price is the credit card price, and you take off some for cash at the register, then it is a cash discount.

Doing a cash discount was a common trick at gas stations to work around terms in their contracts that said they would not have credit card surcharges. There was a lawsuit against such contract terms by merchants who wanted to do a surcharge, and in a settlement in 2013 Visa and Mastercard agreed to allow them (with some restrictions, like no more than 4%, must be a sign disclosing them at the point of sale, had to be included on the receipt, and had to apply to all cards), reducing the need for such tricks in many areas.

There are some states that have laws prohibiting credit card surcharges, so the cash discount trick may still be in use there. California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas. These have been challenged on Free Speech grounds. The Supreme Court has said that they are (well, New York's version, but others are similar) is a regulation of speech, but did not rule whether it was an unconstitutional regulation (the lower courts had not reached that issue) [1]. I don't happen to know what happened to that case after that.

[1] https://www.supremecourt.gov/opinions/16pdf/15-1391_g31i.pdf

Yes. The EU's consumer protection priority is "no hidden fees". They want the advertised price to match reality.

For some transactions the reality is that almost every single purchase will be on a card and the vendor knows it, so advertising a "cash" price was just always going to be misleading. Rather than try to figure out some complicated rule (maybe you can advertise the cash price if most customers pay in person at a store?) the authorities just said it's simpler to ban all fees.

The British news media actually did stuff about this in the last few days. A bunch of famously shady lines of business like letting agencies were still charging extra for credit cards even though that's illegal.

Merchants can offer cash discounts, but cannot add credit card fees. This is due to price transparency rules.

I seem to remember that the store did transfer the costs to the customer in Denmark at least, Maybe 12 years ago. It led to an oproar by consumers faces with paying ~4cent per transaction, and some stores not allowing card payment on purchases less than ~3$.

There was quite a reaction against it, but in the end I assume they dropped this because they say usage numbers drop, though that is just speculation.

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