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Comment by TheDong | Hacker News Reader

The alternative to credit cards that charge 2-3% fees shouldn't be cash, but rather debit cards with close to zero fees.

Cash handling isn't free, but a digital transfer that doesn't have rewards is obviously cheaper than a credit card.

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Debit txs are not free. For big ($10B in assets) regulated issuers they are pretty low, but for everyone else they are close to 1.9%

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

Debit cards get arbitrarily rejected. Some gas stations won't process them. The IRS ID verification for Covid stimulus wouldn't work with debit.

if the credit card merchant was able to extract 2-3% for using their network, what makes you think that a free debit card with low/zero cost wouldn't also be owned by the same credit card merchants and force the same fees to maintain their monopoly?

Because right now debit card purchases don’t have a transaction fee while credit cards do. I just had two recent purchases where the vendor charged a 3% surcharge for credit cards but would do the transaction by debit card free.

It is an example that greed is everywhere. Not only among card issuers but also among merchants. The moment merchant find a socially accepted way to extract extra they will do it. Similar to tip screens on square terminals in all takeout places. Costs nothing to ask, generates some additional revenue.

Because in the US we already have laws that cap the fees on most debit cards: https://www.ftc.gov/system/files/documents/plain-language/bu...

There's even a proposal to drop these fees even lower: https://www.reuters.com/markets/us/us-fed-set-revise-debit-c...

Europe has similar laws capping the fees on both credit cards and debit cards. We could do the same and it would work better for everyone except the credit card companies.

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