Comment by toomuchtodo | Hacker News Reader

Comment by toomuchtodo | Hacker News Reader

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https://www.frbservices.org/financial-services/fednow

https://news.ycombinator.com/item?id=36801491

https://www.axios.com/2023/07/22/fednow-instant-payments-cre...

> FedNow launch hints at payments wars to come

> Pix, the Brazilian instant-payments system, was nonexistent pre-pandemic. Today, per Matera, a Brazilian payments software company, Pix sees 8.1 billion transactions per quarter. That's more than the next two highest payments methods — credit cards and debit cards — combined. Credit card transactions have fallen by 20% in one year. “Pix shows how intuitive payments can be," says Matera CEO Carlos Netto. "It poses the greatest threat yet to credit card dominance."

> Americans will be slow to give up their credit cards. But if merchants get aggressive in pushing us toward something more instantaneous, they could end up saving tens of billions of dollars in interchange fees.

https://www.insiderintelligence.com/content/fednow-could-sco...

> Walmart and Kroger are reportedly interested in using FedNow to give customers an alternative to card payments, according to Payments Dive, which cited comments from the retailers’ representatives during a panel at the Faster Payments Council spring meeting.

Soon.

The only way there's going to be any competition is if stores lower the price of goods by the equivalent amount that they save from credit card transaction fees.

Otherwise, consumers will continue to prefer using credit cards due to cash back, safety, and convenience.

Merchants will surcharge the credit cards to drive consumers to cheaper instant rails. Many already do surcharge, and the number continues to increase. If you want to pay 3-4% extra to use credit card rails as a consumer, that is a choice. T-Mobile requires autopay customers to move to ACH from credit cards to continue to receive their autopay discount. AT&T and Verizon charge surcharges to pay with credit card. This is only the beginning, merchants will get more comfortable as peers make these attempts and are successful.

I expect Walmart’s progress here to be a bellwether. Their consumers are price sensitive and they have the power to drive consumer behavior. Their success (or lack thereof) will drive the actions of smaller volume merchants. Walmart spends ~$3B on credit and debit interchange fees annually; they are highly incentivized to get off of expensive payment rails and specifically commented on this during the public FedNow comment period.

Anecdotally, my landscapers will only take Zelle or a check. I don’t blame them.

https://www.nerdwallet.com/article/small-business/credit-car...

https://www.cnbc.com/2023/07/30/credit-card-fee-fight-pits-p...

https://news.ycombinator.com/item?id=36012866

https://www.federalreserve.gov/SECRS/2019/December/20191227/...

https://www.ft.com/content/c50a840b-394d-45e3-894d-301d9e1fa... | https://archive.today/m3qnH

> Payment consultancy TSG reckons between 5-10 per cent of 8mn card-accepting small businesses in the US now charge fees for credit card usage. That is up from 2 per cent five years ago. Underscoring the growing trend, TSG said about 15 per cent of new merchants who accept card payments have a surcharge policy.

> Business owners may feel they have no choice. Credit card fees, which average 2-4 per cent of the transaction amount, are most merchants’ highest operating cost after labour, says the National Retail Federation. Surcharges help cover the interchange fees that they would otherwise pay to card network and bank.

thats illegal in many EU countries, if not EU wide. its even illegal to print on the reciept how much the credit card transaction fee was

more specifically it is not allowed to charge a fee for common payment methods. exceptions are uncommon credit cards (everything except visa and mastercard) or paypal.

that means if you pay cash or card, the price is the same.

you are also not allowed to reject cards for small amounts.

It honestly doesn't matter much for Europe though because Europe's interchange fees are capped at around 10% the US interchange fees.

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