UK court sets scene for $14B-plus class action against MasterCard | Hacker News Reader

UK court sets scene for $14B-plus class action against MasterCard

reuters.com

51 pointsvishnugupta16 comments

Visa, Mastercard, and amex are a tax on the world, propped up not by being good, but by anti-competitive behavior.

It's absolutely insane the fees they charge.

I am not an expert but I understand merchants here in the US pay about 2.5-3% in fees. Of these, they are split between the merchant's bank (called the acquirer), the merchant's service provider (if any, like Square or Whatever), the network (Mastercard, etc.), and the cardholders bank (called the issuer). Note that sometimes the issuer and network are the same (e.g., for AmEx and Discover).

I am curious how 3% is "absolutely insane"? I pay almost 9% in sales tax. Apple store takes 15-30% cut of apps. Parking tax in NYC is almost 19%. I tip 20+% regularly at restaurants and usually much more for home delivery people. Some Banks charge $25+ For a wire transfer, sometimes even to receive one. I do not "feel" like 3% is a lot. Could it be less? Sure - give up your rewards cards though because your issuer may not be able to afford it.

Now that some merchants charge a few percent for using cards, the cost is not even borne by them.

If most purchases are from cards (not saying they are, but we are slowly trending that way) that's essentially a 3% drain on the entire economy for shuffling around some rows in a database.

If I were a government overseeing an economy that has a total expected yearly GDP growth of less than 3% (like the US/EU/UK) then I would exceedingly interested in removing that drain on the system.

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If anything, I'd say rewards cards are the perfect example of a product resulting from a system that has too much revenue compared to costs.

They make so much money from having you use your card that they're willing to share some of it with you (admittedly - often through convoluted systems that are hard to place a real dollar value on).

None of the things you listed are really comparable. What does the cost of running schools and police and fire and so on tell you about whether the cost for a transaction is reasonable.

That being said my understanding is the cost sources from risk involved in credit risks and other guarantees on credit cards not the actual transaction of the money. E.g. debit cards have far lower merchant fees but don't assume any of those risks. From that perspective the premium makes more sense, not because you give tips on a meal that are larger.

A tax on the US citizen. In Europe, those fees are capped.

Sort of, but in the EU law came in a few years back that made it illegal to charge extra to cover CC processing fees over - say - payments by cash. This meant that companies either swallow the cost or increase prices across the board to cater for the likelihood of that item being bought by card.

Now, this is great for supermarkets or companies able to get very low processing charge percentages - shitty for everyone else, including the likes of me who receive less than 5% of payments by card and thus have a higher percentage to pay.

Personally, I break the law and state on my invoice that CC payments will be charged extra. shrug

Quite why we can't have this clearly essential service delivered by a non-corporate entity, I don't know.

In Europe, there is a project to create an European official payment processor that would be a competitor to visa, MasterCard, ... It is the EPI project.

Wirecard just filed for bancrupcy after 1.9 Billion euros dissapeared.

Can you not accept SEPA instant payments in lieu of CC payments?

Perhaps if my country were still in the EU I might, but I do accept direct bank transfers, which comprise the vast bulk of my payments.

Sometimes however, clients can't pay by bank transfer and need instead to pay by card.

Capped but still present. So a smaller tax, but still tax.

> Merricks alleges Mastercard charged excessive “interchange” fees – the fees retailers pay credit card companies when consumers use a card to shop - between May 1992 and June 2008 and that those fees were passed on to consumers as retailers raised prices

Before I clicked I thought this was their monopoly under scrutiny and not about fees, since the only CC companies I know of is Amex/Visa/Mastercard who have a stranglehold on the market, much like Google & Facebook.

Cryptocurrency will hopefully change this, as I believe that's one of cryptocurrency's promises. Already I sound dated since crypto is now a mature thing you can actually use, albeit with some teething problems still present that haven't been ironed out.

Considering most people in UK or even in EU uses Debit Card, and Debit Card has very low rate. What exactly is the problem here?

What is excessive about it ?

Nice. Hope it’s available to expatriates

Check FAQ#6: https://www.mastercardconsumerclaim.co.uk/Home/Faq#faq6

though it has to be seen if the Court will accept that.

Should be 1.4 trillion. This just repeats the pattern, make money doing bad things, pay 10% of ill gotten profits back as "penalty".

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