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Comment by sunflowerfly | Hacker News Reader

Every terminal should be required to run any legitimate card on its own network.

You can't process a Mastercard transaction over Visanet even if you wanted to: * The network won't know who to route the BIN range to * Even if it did, they may not be connected * Visa and Mastercard, although very similar, put different pieces of data in different places and have different business rules, so you're not necessarily going to have the information you need to process a transaction where you expect to find it nor is your processing of that transaction necessarily acceptable to Visanet. * Visa doesn't know Mastercard's PEK, so they cannot encrypt the PIN as the issuer would expect it even if they wanted to * The EMV crypto might not work, although I'm not sure

These are just the problems that occur to me off the top of my head. They are solveable, but it would require a decade-long regulatory commitment with serious weight behind it.

Why? If I want to make a terminal, why should that be illegal.

What regulators should really focus on in my opinion is any uncompetitive contractual obligations visa is imposing on vendors.

Because interoperability is key to competition...?

Imagine a universe where different hardware doesn't interoperate (e.g. androids can't call iphones, Macs can't use google.com, ChatGPT is only accessible to Comcast subscribers) I hope we can all agree it's a nightmare scenario. Sometimes the free market gets it right without intervention, sadly sometimes it does not.

> androids can't call iphones

Oh, you mean like how iOS has a private text chat system Androids can't access, and they're only kinda partially giving access to some of the features a decade later? Wouldn't that be crazy.

> androids can't call iPhones

Nextel had exactly this with the walkie talkie feature and the market sorted it out.

I can imagine a universe where payment systems selectively interoperate. It is pretty common now. tells can have multiple pieces of hardware.

They do, sort of. What happens IME is that the terminal is linked to a gateway, and then the gateway links to a processor, and then the processor contacts the issuer through the payment network. Most gateways can contact many processors, and many processors can contact any issuer through several payment networks.

What seems to be happening is that the payment networks are making exclusive deals with big issuers like banks and these deals are allowing specific payment networks to have a lot of pricing power with merchants, who have to pay a fee to everyone involved in the transaction(gateway, processor, etc).

Or we could, you know, just have a reasonable government option. Like ACH for debit cards.

This seems like a perfect opportunity for a common good. Something to make transactions easier and cheaper and help keep the economy running.

But that would be big-government-communism-anti-jobs-whatever-people-are-mad-at. So that’s not how we do it.

We’re getting FedNow (eventually). Seems like you could built a debit card processor on top of that.

You may still need Visa/MC/whatever for international customers to use debit. But American has a lot of Americans doing debit from American bank accounts.

> We’re getting FedNow (eventually)

It’s technically live [1].

[1] https://www.frbservices.org/financial-services/fednow/organi...

Right, I knew it had launched in the last few months. But most people don’t have it yet. None of the big banks are on that list.

It’ll just take time.

There is probably some backroom dealing regarding the future of TCH's RTP rails [1].

[1] https://www.theclearinghouse.org/payment-systems/rtp

I’m gonna be honest I’m a little worried that FedNow is too little too late. If it’s never widely deployed, people won’t know it exists and ask for it.

And that means the banks can continue to push their Venmo competitor Zelle. And I’m guessing they somehow make more money that way. Or maybe push people to their 1st Local Town Visa credit card offer, now with 0.05% cash back!

> that means the banks can continue to push their Venmo competitor Zelle. And I’m guessing they somehow make more money that way

The cost to send a request for payment is 10x on RTP what it is on FedNow [1].

Both of those are real-time settled, i.e. when you send a money from your bank, your bank no longer has the money the moment you send it. Zelle, on the other hand, isn't a payment rail--it settles over ACH [2]. The receiving bank may credit their customer as a courtesy. But the originating bank gets to hold onto the money and earn interest off it. (Technically, the receiving bank is paying interest on the credited funds. But that's why the credits are capped well below ACH's limits.)

At the end of the day, for FedNow to succeed it has to be a win for consumers. As in, would you change banks to get access to FedNow? (My bank doesn't support Zelle, for example.)

[1] https://www.crossriver.com/insights/comparing-rtp-and-fednow

[2] https://www.paymentsjournal.com/the-clearing-house-and-early...

I think you missed the Excel spreadsheet in the parent's link. Chase (under JPMORGAN CHASE BANK) and Wells Fargo are on that list.

Interestingly, the other 2 big banks—Citigroup and Bank of America—are missing. They both do support RTP though (which apparently is a different network operated by the same entity that backs ACH). Unsure if RTP is meant to compete with FedNow.

I did. That list is much more impressive.

Thank you.

And every transaction should have a fixed cost, no matter what the amount is.

Risk & value scale with transaction size

And with account type.

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