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Comment by delusional | Hacker News Reader

> Yea, I don't want to defend Visa, but a lot of their dominance came from network effects.

I think it's worth noting that VISA is also really doing a pretty good job. Like the cards work. Here in Europe they seem eager to adopt emerging technology and are willing to invest to maintain their dominance.

There's a ton of not so consumer friendly backroom deals with kickbacks for the banks and stuff, but the core product is roughly what consumers desire. A card that works almost 100% of the time without any difficulty. While simultaneously implementing and adopting whatever weird regulations get passed into law.

They are, in my opinion, doing a decent job.

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They aren't very vendor friendly and their fees are way too high. Little bit like Amazon. they are are consumer friendly at the expense of their vendors.

> they are are consumer friendly at the expense of their vendors.

Isn't this a winning formula because the consumer is the one spending the money? Imagine an opposite approach that was vendor-friendly at the expense of the consumer. I don't think most people would willingly use that.

Back before Amazon, WalMart did the same thing[1] by squeezing their vendors to lower prices and passing (some of) the savings onto shoppers.

They aren't mutually exclusive. They used to be merchant friendly.

Compared to Stripe which charges 2-3% roughly, Visa/Mastercard gateways charge 0.3-0.5%. Not sure where the high fees argument comes from, or I'm misconstruing something here.

Like an aforementioned comment stated above, their dominance is all about consumer convenience reinforcing vendor adoption. If you have an equally smooth payment process to compete against that, it will crumble. Case in point, India and UPI. Credit cards are largely used by the most affluent today, simply because UPI has become so prevalent for general transactions. UPI are actually a much easier way to carry out payments than credits cards are.

But of course, American banking is ages away with even FedNow not having been implemented in any strong form whatsoever.

Visa and MC are four party payment systems. In short, the fees paid on a transaction are split between the merchant acquirer cut (merchant service charge), the card network (scheme fees) and the card issuer's bank (interchange).

Stripe is a merchant acquirer and Visa/MC a card network.

The 2%-3% are the total fees imposed by a stripe, a merchant acquirer. The 0.3% is Visa's cut. After subtracting the card issuer's cut, what remains goes to Stripe.

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