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Comment by toomuchtodo | Hacker News Reader

> FedNow will all but directly kill their primary business.

Good riddance. Come for Visa and Mastercard next. $57B in combined revenue in 2023.

Interestingly the market isn't regarding FedNow as a serious threat to Visa & Co. at all. Visa's stock is at an all-time high ($569 billion market cap, making them the most highly valued financial services company in the world).

The belief must be that credit cards will retain their utility (purchase protection being one), both in the US and globally.

I would expect Visa's extraordinary margins to get damaged by FedNow.

Agreed.

“There's no particular reason why this kind of financial intermediation should be a $100 billion industry, rife with inefficiencies.”

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

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

https://www.usbank.com/corporate-and-commercial-banking/cfo-...

https://www.moderntreasury.com/journal/bank-payments-as-a-cr...

Purchase protection is a minor thing. The credit card companies let you spend money to don’t have, and that is valuable to both sides of the transaction.

The market may be looking at the Europe where instant wire transfers are free and people use them (paying rent, phone, anything recurring, paying for larger items like a car). Often people use them to split a lunch bill.

Mastercard/Visa is a huge thing here in retail but PayPal is really niche. No app leveraging the instant wire transfers is getting much traction. The network effects are huge and the card fees apparently aren't that high.

Card fees here in Europe are capped on consumer cards at 0.2% for debit and 0.3% for credit.

This doesn't seem right. At least from the small business point of view. The banks here in CZ charge around 1 % + $10/month for the device and card acceptance.

He is talking about the card network, your fees include the card issuer and other things

I see. But the business owner will compare the whole amount vs. an alternative system's fees.

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