> More than 60% of debit transactions in the U.S. run over Visa rails, helping it charge more than $7 billion annually in processing fees, according to the DOJ complaint.
Is that really a monopoly though?
Is that really a monopoly though?
> The DOJ said Visa imposed “exclusionary” agreements on partners and smothered upstart firms.
- Monopoly market share
- Negative impact to customers
(e.g. higher prices)
- Collusion to thwart competition
The latter two are more relevant to modern global enterprise competition. A duopoly isn't really optimally lowering prices for anything, as there's limited risk of defection and price signaling is pretty easy.
Is there no alternative system that succeeds in affording both convenience and low (even state-subsidized) costs?
Call me old fashioned, but if that's a thing you want to do in a democracy, there should be a legal basis passed through the legislative branch...
It was never the US government? It was always done by advocacy groups with good law firms suing Visa for _whatever_ until Visa """voluntarily""" censored porn payments.
(WARNING: Some pretty nasty stuff mentioned; text, not pictures) https://web.archive.org/web/20060321172250/http://www.thestr...
Primarily through leveraging the power of the AG to apply on-the-books obscenity laws to material which previously hadn't been targeted as such.
When the courts took a dim view towards that, they decided they could get quicker wins by making it clear to Visa et al. that things would be uncomfortable if they didn't "voluntarily" choose to stop doing business with pornographic companies.
Avoiding a category like that (or holding it to stricter standards) seems rather reasonable.
There are many other high risk industries they don't seem to have a problem with.
The merchant bears the brunt of the economic loss, but chargebacks are a relatively expensive hassle for the network too, and ultimately they will drop merchants who cannot keep chargebacks low.
Around 0.5% is considered reasonable. Anywhere in the 1% area for more than a few months will get a merchant dropped.
You’re assuming quite a few things - the most significant are that the cost is borne equally among Americans. Instead, many Americans use credit card networks instead of debit cards, and those who use debit cards may have no option to avoid the fees.
Of the $32.653 billon in revenue Visa pulled in last year, 2.3% was network and processing opex, while 53% was pure bottom line profit[1].
Furthermore, squaring 17.9% tax provision line item: if your household had simple married-filing-jointly tax return with an AGI greater than ~$139.5k, you paid more in 2023 taxes than Visa...and that assumes you live in a state without income taxes.
Think about that for a hot minute while recalibrating expectations.
[1] https://www.sec.gov/Archives/edgar/data/1403161/000140316123...
How much did visa pay in taxes? Less than a single 140k family? Why are we comparing corporate taxes and individual taxes? They are completely different.
It is a bogus comparison. Visa might "only" pay 17%, but if you are an owner, you are paying 17% and then another 20% on what's left.
[1] https://www.nber.org/papers/w28542
[2] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3089423
That's +1% share of a pie on the order of $TRILLIONS between 2006-2013 to which the top-1% directly benefited from by under-reporting and playing pass-through games...and this was retrospective analysis long before the TCJA corporate tailwind went into effect.
Im not saying it is zero dollars. Just pointing out that it is 1% for context. 50% of income would be a very different context.
If you’re the sort to buy into conventional economic theory, that VISA faces no effective competition.
No...the proportional equivalent impact of ~150,300 $140k families.
I guess this is a way of highlighting the idea that individuals should be fundamental unit of tax assessment, collection, and evaluation. It is humans that receive government benefits, and it is humans that should pay for it.
Other methods of analysis run the risk of double counting benefits or payments.
My hot minute is that corporations don't pay taxes, consumers do via higher product\services prices, investors do via lower investment returns, or the employees do via lower wages.
And the bonus, the government gets less taxes from those lower investment returns and lower wages.