Okay so is Steam enough of a money printer for Valve to say "well fuck you guys, we'll make our own credit card with hookers and bingo"? And hold out Half-Life 3 (only purchasable with the ValveCard) as a carrot?
To replace visa/mastercard you need to have thousands of banks support ValveCard across the world. It's hard to imagine how it's going to happen. Players will not switch to another (probably foreign) bank just to buy Half-Life 3. They'll pirate it.
By the way, Gabe has a very famous quote:
> Piracy is a service problem.
He knows it very well that if it's hard for players to buy something they'll just get it free anyway. You can say he's probably the first person in the world who realized this idea profoundly enough to turn it into a business. It's very risky for Steam to make buying games even slightly harder.
Through Visa and Mastercard
You can’t run your own card network easily because you would have to convince all of the merchant banks that take card transactions to do business with you.
Digital money movement requires an operating agreement between at least two financial entities - but most of the time there’s a lot more. Depending on the type of transaction you may have two or more gateways, facilitators, processors, issuers and underlying banks involved.
It’s a very fragmented system that relies on many, many different entities all having agreements and contracts with eachother.
You get your card from your issuing bank, so the consumer’s last mile is the bank’s problem. The merchant get their POS/gateway from the acquirers. Your bank and the merchants acquirer don’t know each other.
Visa and Mastercard are intermediaries. There’s no way a NatWest card in the UK is connected to whatever POS is in Chile or whatever. They all route through the card brands.
This is why it’s so tough to break this monopoly.
The issue is Visa/Mastercard/whoever is pressuring Valve isn't happy about the very existence of incest games. They don't want to be associated with incest/rape even indirectly.
If a book publisher was selling erotic fiction about children online, you could bet your ass they would have a hard time with payment processors.
I’m not sure you have a case with this argument.
Amazon, Walmart, Target and then increasingly unsure.
But they have partnered with GS and MC. Far from any sort of "finance industry roots".
They essentially offer a fancy UI on top of GS products and other traditional banks.
Apple Cash -> Green Dot or some other no name bank
Apple Card -> Goldman Sachs
Apple Pay -> some very small percentage of the bank and network fees charged to merchants
In some countries the vast majority of payments are done via phone apps for national payment systems already, bypassing Visa/Mastercard etc. entirely. Even kids pay for candy by phone.
> Likely Apple currently has the deepest finance industry roots.
Apple used a very large bank headquartered in the US for its credit card processing as of about ten years ago. Given that the cost of change is significant once these processes are put in place, it is likely this remains the case.
Note that this is not the same as what Apple Pay supports.
In days of yore, Visa did processing on IBM iron. The iron in question took a while to boot, and time is very definitely money to Visa and they wanted to speed up reboots (e.g., after a crash). Saving seconds = $$$.
Visa to IBM: "Please give us the source code for the <boot path stuff>, it's costing us money."
IBM: LOL
Visa to some big banks: "Please tell IBM to give us the source code for this, it's costing you money."
IBM, a little later: "Here's a tape. Need any help?"
Visa is a clearing house whose members are banks. Think of it like a payment router between issuers (banks) and processors (banks).
Only sponsored organizations can directly use the "Visa rails", where "sponsor" is defined as a bank, a bank subsidiary, or an entity previously sponsored by one of the other two.
This is also the case for MasterCard and Discover. "Traditional" American Express is different though.
> Amazon, Walmart, Target and then increasingly unsure.
Those merchants use banks or one of their subsidiaries for processing credit card transactions. Most large merchants do as well in order to minimize their discount rate as well as other transaction fees. Smaller merchants often use ISO's or VAR's for business specific reason, knowing both ultimately transact with a bank or one of a bank's subsidiaries.
I know at least two of the above used to use a specific US bank for the credit card transactions backing their payment services. For others, if service usage requires a verified credit card or debit card backed by a credit card network, they too use a processor owned/operated by a bank, bank subsidiary, or an entity sponsored by same.
EDIT:
For payment services which do not require a credit card or debit card backed by a credit card network, they almost certainly use the ACH[0] network. This is a more intimate financial relationship and best used with a dedicated bank account not linked to any others, as fund transfers can be bidirectional.
From a card holder's perspective regarding a transaction being voided or refunded, sure. What I was talking about are services where the account holder can equally perform purchases as well as receive payments.
> I meant to mention Zelle and Plaid too, since they integrate with many (most?) banks already to allow transfers via your online account login authentication credentials instead of traditional ACH
For the purposes of bidirectional fund transfers, the mechanism for how it is implemented is moot. The net effect and account access (intimacy) is functionally the same.
China would never! /s
[1]: https://www.bbc.com/news/technology-58384457
[2]: https://www.reuters.com/world/china/china-issues-draft-rules...
[1] as a random example: https://archive.kyivpost.com/technology/japanese-payment-sys...
Interac[1] is Canada's debit system, originally created as a non-profit by our largest banks way back in '84, and these days is supported everywhere. The large banks are already used to bullying their way through political or bureaucratic challenges, and a single Canadian bank typically has trillion(s) in managed assets - they _can_ bully Visa.
Zelle[2] (2016) is a limited (etransfer only) clone for the American market, UPI (2016) in India, UnionPay (2002) in China, carte Bleue (1967) in France, etc etc. What's missing is cooperation between national systems like these, as well as lending as they typically only do debit instead of credit.
Any cooperation between these systems would likely get spun out as a separate entity, which would eventually just turn into a new Visa or Mastercard - but 3 choices is better than 2.
[1]: https://en.wikipedia.org/wiki/Interac [2]: https://en.wikipedia.org/wiki/Zelle [3] https://en.wikipedia.org/wiki/Unified_Payments_Interface
Those are all US companies so subject to the same puritan pressures. Their cards would still be good for buying ultra violent games but not sex games...
https://news.ycombinator.com/item?id=36012866
And really, even banking isn't a safe harbor. I am pretty sure they were at the forefront of the rise in neobanks and products like green dot cards.
> Leaked internal slides peg Steam’s net revenue last fiscal year at just under $10 billion
https://www.simplymac.com/games/3-5m-per-employee-how-valve-...
All that stemmed from an unlikely but existential fear that Microsoft could lock-down software distribution on Windows. My suspicion is that SteamOS sales and Steam Decks aren't actually profitable, they're just too valuable as a bargaining chip not to invest in. And Valve can invest in them, because they're rich and private.
While Valve bigwigs probably aren't losing sleep over the missed revenue from incest games, having the rest of their revenue stream threatened might make them seek another form of insurance.
Maybe crypto is an option but I haven’t seen use in retail. Only speculation instrument.
Apple tried. Failed. Google tried. Failed. Only thing that works is partnering up with existing bank
> Only thing that works is partnering up with existing bank
Could Visa just reject payments from this bank and kill your whole thing?
It's just like matter and antimatter being created at the same time, money and anti-money (debt) are created at the same time and when they meet, they cancel each other out.
So borrowing literally creates money (and debt), and repaying debts literally deletes money (and debt).
Does the bank itself use its own money to pay off the debt (deleting some of their own money), or do they simply delete the debt?
In principle, it is 'the bank uses its own money to pay off the debt', as long as you accept that the bank's own 'credit worthiness reputation' and other assets count as 'money'. The hit is _ultimately_ taken by the capital shareholders in the bank, which is the important part.