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> The thing with credit cards is that you can have more than one. I have a Visa and a Mastercard and when I shop at Costco I use Visa.

Well... yeah. No shit. Because you couldn't use the Mastercard if you wanted to. That's what this article is complaining about. And in their most recent quarter Costco posted a handy 80 billion in net sales, I'm betting those processing fees added up to a tidy sum for Visa, corroborated in the fact that they plunked down 150 million to keep it exclusive to them.

> I don't see this reason stopping someone wanting to compete as though if they can't get the Costco dollars, they have no product.

It's literally textbook pay for play. It's purchasing an advantage in an open market. Mastercard will receive no transaction fees from Costco this or any year unless this agreement is revisited, and not because people don't want to use Mastercards there, but because Visa paid Costco to not let them. How is that anything but anti-competitive?

Is it any different from a movie theatre or restaurant selling only Pepsi products due to exclusive agreement?

Or Playstation paying for a game to be distributed only on their platform?

How about a sports team only allowing Reebok or Nike or Adidas or whatever?

Don't get me started on Netflix only movies!

1) Whataboutism is not a counterpoint

2) Half of these are completely nonsensical and apples and oranges to the topic.

It's not whataboutism. Whataboutism would be 'what about children dying in Darfur?'

This is an explanation that this practice is normal in a competitive environment and trying to prevent exclusive deals is silly if you extrapolate it to other domains

In other words, create a rule or principal that's clear and not specific to this situation. Because right now the principal seems to be exclusive deals between businesses should be illegal and I explained a handful of cases where this would obviously apply

The fact that monopolistic agreements are common place doesn't make them competitive.

As with every single time something monopolistic comes up on HN. You can squash one instance of it at a time; you do not need to address every single one in a fell swoop.

Yes, all these are anti-competitive. But illegally anti-competitive? That is not really possible to resolve in a HN comment. Every market in every region is different, and whether some exclusive contract is or is not anti-competitive has to be resolved in court, which looks at all the details of the matter.

You can have a Mastercard, but now if you want to shop at Costco with credit you have to have a Visa. Not having a Visa card is much less of an option for many individual customers, and not accepting Visa is much less of an option for other merchants.

> You can have a Mastercard, but now if you want to shop at Costco with credit you have to have a Visa.

Or you simply shop at Costco without a credit card, and pay cash instead. :-)

And simply pay 1-2% more than everyone else using a Visa card.

Even if this is potentially true, 1 to 2 % is a very fair price to pay to be independent of their credit card network and paying much more anonymously.

This is Costco, you have a membership tied to your identity which they check every time you enter the store and checkout. Your order history is tied to your membership. There is no "anonymous" purchasing at Costco. They likely share your purchasing decisions with Visa whether you use the card or not.

Interesting that here in Europe I have never seen a store accept Visa or Mastercard exclusively.

Since neither company is above such tactics, I can only guess that it's a bit illegal.

> thing with credit cards is that you can have more than one. I have a Visa and a Mastercard and when I shop at Costco I use Visa. I don't see this reason stopping someone wanting to compete as though if they can't get the Costco dollars, they have no product.

I'm sorry, are we really saying that it's acceptable for the market to begin preferring one completely compatible payment network vs another? This is clearly an undue influence in the market due to monopolistic power being used as leverage. No one should have to open an account with visa just to shop at a retailer. Anti competitive and anti consumer to the core.

> But that really has to do with ridiculous regulations and things like KYC, but we're not ready to have that conversation yet.

Ahhh, fearmongering about KYC. Know your customer is an obviously good regulation for banks to know the type of business they are partnering with for both risk assessment and anti fraud protections. So, what scams are you in favor of allowing by removing KYC regulations?

> No one should have to open an account with visa just to shop at a retailer.

You know you have to pay just to enter Costco right? What's the difference if they want to force customers to use cash or Visa. Do you feel the same way about businesses that reject Discover?

I really don't understand the outrage.

> Ahhh, fearmongering about KYC. Know your customer is an obviously good regulation for banks to know the type of business they are partnering with for both risk assessment and anti fraud protections. So, what scams are you in favor of allowing by removing KYC regulations?

KYC and AML measures have a limited impact on stopping fraud and terrorism financing. Current efforts intercept only an estimated 0.1 to 0.2 percent of laundered money. A 2018 study suggested that the overall impact of AML policy intervention on criminal finances is less than 0.1 percent, which is considered negligible. This aligns with a 2011 UNODC report indicating that "much less than one percent (probably around 0.2 percent)" of the proceeds of crime laundered via the global financial system are seized and frozen.

Regulations should not be judged by intentions but rather results

https://www.gisreportsonline.com/r/why-anti-money-laundering...

> What's the difference if they want to force customers to use cash or Visa.

I'll leave the cash option aside because the provider of cash is the US treasury. But yes, I do think it is wrong for a merchant to only allow mastercard or visa or discover. I understand merchants not taking Amex because their fees are significantly higher on the merchant side, but discover, mastercard, and visa are all similar for the merchant. I work in payment processing for a multi billion dollar company and we gladly accept all of these card types. My issue is with visa providing Costco with a kickback, so that Costco then pressures you to have an account with visa. It should be totally fine if someone just happens to have only mastercard cards and wants to shop at costco. I'm against kickback schemes.

As for the AML/KYC ineffectiveness argument, I'm reading through that 2018 study now.

I don’t understand this line of argument at all… Costco has competitors, you do NOT have to go to Costco. I choose not to go to many places because I disagree with their business practices or politics or whatever I feel like - it is my right. I do not understand this at all - especially in America. You don’t want my MasterCard or Discover or WhateverNewPaymentThingy? Great, imma head over to XYZ and spend my money there. Going to Costco (or any other business) and saying “you must accept XYZQ form of payment or else…” feels China-ish at best. And excusing Amex - why is that?! Fees alone? So we’d be cool if Visa just said “whatever you have to pay MC/Discover we’ll do it for one penny less”? At Costco’s scale that’d still be a boatload of money

> And excusing Amex - why is that?! Fees alone?

To be fair, the core AMEX product is a charge card, not a credit card. They have more recently expanded into a few credit card products. I don't know the exact details, but my understanding is that the charge card system is more merchant hostile than the credit card system and more than simply larger fees.

but we are establishing here that companies (like Costco) have the right to choose which payment methods they allow in their store… if they can (of course they can and no one should stop them) then they can - end of story

If you want a healthy market, your standard cannot simply be: As long as there is more than one retailer in the space, retailers can place whatever restrictions they want on how you pay for their services. Businesses in one sector being able to directly affect consumer choices across sectors is how you end up with cross sector monopolies.

It is bizarre to bring up China here, this isn't about the state dictating the payment system but maintaining a healthy market. It's like a garden, you don't dictate exactly how the plants grow, but you prune them once they encroach onto other plants to maintain a healthy balance.

I brought up Amex because it is common for merchants to not accept it, due to it being a significantly worse deal for the merchants. I am fine with the argument for an even more expansive version of my argument, but I'm making a more narrow argument due to discover, visa, mastercard being so close in how they function that it is not a burden on merchants to accept one vs the others.

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