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Comment by lgleason | Hacker News Reader

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?

Reply on news.ycombinator.com