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Comment by MuffinFlavored | Hacker News Reader

> The deal, which is expected to receive intense antitrust scrutiny,

So... it is highly possible/more than likely it will not go through?

One can hope. The novus network attempts to provide a semblance of competition to AMEX, Visa and Mastercard in the US.

Do North American consumers/merchants pay less in processing fees overall than European/Asian counterparts or is it roughly 1-3% all over the world?

As far as I can tell, consumer interchange fees in the US are significantly higher than they are in Europe. The interchange fees for Visa and MC consumer products within the EEU are 0.2–0.3%[0][1], whereas in the US they are from 1–3%[2][3].

[0] https://www.visa.co.uk/dam/VCOM/regional/ve/unitedkingdom/PD...

[1] https://www.mastercard.co.uk/content/dam/public/mastercardco...

[2] https://usa.visa.com/content/dam/VCOM/download/merchants/vis...

[3] https://www.mastercard.us/content/dam/public/mastercardcom/n...

I asked ChatGPT about this. It said for interchange portion, sure. I'm not sure if EU payment processors finds a way to make it up in different portions of the fees so that it evens out to the same 1-3%?

Not really, no. It's more than enough for them to operate on. The only downside from the American point of view is that banks very rarely offer cashback, points, etc.

> In Europe, credit card processing fees are generally lower compared to other regions, partly due to regulatory caps on interchange fees. For consumer debit and credit cards issued within the European Economic Area (EEA), the interchange fees are capped at 0.2% and 0.3% of the transaction value, respectively. However, total processing costs for merchants can be higher once all fees are included, often ranging from 1% to 2% per transaction.

You seem to be quoting ChatGPT, and you're not even specifying that it's ChatGPT-4, so I automatically assume ChatGPT-3.5, which hallucinates at an astonishing rate. Regardless, all current LLMs can hallucinate. As ChatGPT's disclaimer says, "ChatGPT can make mistakes. Consider checking important information."

A non-GPT source: https://www.lendingtree.com/credit-cards/articles/na-vs-eu-i...

Quoting the relevant statement: "American merchants pay, on average, 1.76% in interchange fees – compared to a 0.96% average in most European nations."

Most of the other sources I'm seeing are quoting even lower numbers. Transactions do seem to have less overhead in Europe than North America.

I’m using ChatGPT 4

You keep talking about interchange fees

That’s one part of the equation

https://www.clearlypayments.com/blog/interchange-fees-by-cou...

"If your business wants to accept credit cards, you’ll need to pay a fee. Interchange makes up the bulk of that cost which merchants pay, roughly 75% it."

It makes sense that people are focusing on the interchange fees.

I have not found a single source that indicates European merchants have fees that are comparable in scale to their North American counterparts. If you want to make that argument, you should find an actual source.

> Do North American consumers/merchants pay less in processing fees overall than European/Asian counterparts or is it roughly 1-3% all over the world?

The answer seems to be the opposite. North American merchants pay more.

It doesn't "hallucinate." It provides incorrect output. That is all.

"Hallucination" is a widely understood and accepted term in the LLM industry. If you want to change that, replying to my comment doesn't seem to be the most effective place to start. I don't know that it's the best term, but it seems better than re-explaining the issue in detail every time.

"Incorrect output" is broader, encompassing other failure modes. If you ask an LLM to respond in JSON with a list of common foods, and it instead writes a paragraph of text that contains a list of common foods, then that would not qualify as a "hallucination" by my understanding of the accepted definition, but it is still "incorrect output".

"Incorrect output" is still correct to describe the cited behavior. "Hallucination" isn't. If a human behaves the same way when asked a question, we do not say he's hallucinating.

One way to devalue incorrect terminology is to call it out when you see it, and use something accurate instead. That's how people learn.

In addition to the interchange fee, the payment processors and the banks involved in the transaction charge their own fees. When I last checked it in Finland a few years ago, the list price from a traditional payment processor with a monthly fee was a little under 1%, assuming that the card was a European consumer credit card. Business cards and foreign cards could have higher fees, up to around 1.5%. Non-traditional payment processors without a monthly fee charged a bit under 2% for every transaction, regardless of the card.

Also, regulatory caps are not the real reason for lower fees. In some European countries, banks were traditionally focused on efficiency. Because merchants were used to cheap payment methods, credit cards didn't become widely accepted until the fees got low enough. Then the EU and the common market happened. The efficient banks with low fees realized they could gain market share in other countries by offering cheaper payment services. Visa and MasterCard didn't like that and tried to ban the practice. Then the EU didn't like that and eventually ended up imposing a cap on interchange fees.

What's with all these "I asked ChatGPT" comments? I've seen quite a few, and I don't think any of them have added anything to a conversation.

How else would you quickly try to understand complex research topics like:

"how much are payment processing fees in north america compared to europe/asia"?

I'd probably type that into a search engine, come across https://en.wikipedia.org/wiki/Interchange_fee, and have all the information I'm looking for.

The fees are significantly lower in Europe, the rewards/kick backs given to card holders are also less.

How would that change after this merger?

There’s absolutely no fucking chance this deal goes through in the current climate. It’s not clear why they are even trying.

It’s not just the Biden antitrust contingency it’s going to be Visa/MC and the other big banks lining up against it too. And there’s a non-trivial coalition of Republicans also against this kind of thing.

I mean, T-Mobile bought Sprint. Antitrust laws might as well not exist in America

It’s unfortunate for business planning but probably fortunate for consumers that the FTC and DOJ change leadership with presidential terms —- Biden’s FTC is a much different entity than Trump’s was when Sprint and T Mobile merged.

I mean, Spirit wasn't sold to JetBlue, and Adobe/Figma called off their courtship (likely due to fear of regulator disapproval) with in the past few months.

But before T-mobile bought Sprint, ATT was blocked from acquiring T-mobile.

This is a recent uptick in enforcement actions.

Meanwhile, TicketMaster/LiveNation/(scalping thing) has demonstrated a textbook consumer-harming monopoly for DECADES with impunity. DECADES.

And politicians and agencies wave hands over "inflation" while the four U.S. meat producers report 90% profit increases (after whining about a "labor shortage"). NINETY PERCENT increases.

Corporate toadies in Congress sit back and pretend that the Fed's feckless interest-rate hikes are all we can do. Disgusting.

Sprint wouldn't have survived as an independent company. They made a fatal mistake by betting the company on WiMax and then the rest of the industry decided to go with 4G LTE instead. This left Sprint without enough capital to build out a competitive nationwide 5G network. Allowing T-Mobile to buy Sprint was a better outcome for consumers than allowing Sprint to slowly go bankrupt as there will now be three viable nationwide networks.

This is completely different. If T-Mobile hadn’t bought Sprint, Sprint would have gone out of business. It had bedn losing money for years.

Then the spectrum they had licenses to - the main reason T-Mobile wanted sprint, would have been auctioned off and probably still would have had t-mobile buy it since they needed it the most.

Besides At&T was already dealing with a ton of debt and if Verizon had bought it, the landscape would have been less competitive

basically deal goes thru is p(republican admin takes over) + p(win in court) + p(settlement deal of some sort).

You should replace all + with * in your formula.

Or use log-probabilities

any of these would result in deal going through

a republican admin denied Visa + plaid... so I wouldn't assume anything

Trump won in 2016, then lost in 2020 because he lost XYZ groups of voters.

All of the people who didn't vote for Trump in 2020, why would they flip from Democrat to Republican and vote for him in 2024?

Trump got more votes in 2020 than he did in 2016, IIRC. While some people most likely did flip to Biden in 2020, there were also many, many people who voted 3rd-party in 2016 who didn't in 2020, and I think there was also higher voter turnout.

The danger, as usual for Democrats, isn't people flipping to Trump, it's people not bothering to vote (or giving it to another party like the Greens) because they don't like the Dems' candidate. For the most part, Hillary didn't lose in 2016 because people voted for Trump instead of her; she lost because voters who normally would have voted (D) either stayed at home or voted for a protest party. Biden didn't have so much of a problem this way, for various reasons (voters liked him better to begin with, and they had just lived through the horrors of 4 years of a Trump presidency).

The current (democrat) president was a Senator from Delaware whose nickname was "Credit Card Joe" because he was so friendly to the credit card companies which are big powers in his state. Partisan politics aside, Joe Biden's been known since the 80s as an extremely pro bank and credit card politician.

Here are some Left leaning articles on the matter: https://www.motherjones.com/politics/2019/11/biden-bankruptc... https://www.propublica.org/article/bidens-cozy-relations-wit...

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