Visa and Mastercard: The global payment duopoly (2024) | Hacker News Reader

Visa and Mastercard: The global payment duopoly (2024)

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396 pointsbilekas305 comments

Brazil central bank introduced Pix a few years ago. It took over the country as the public basic infrastructure for money transfer. Totally free and instantaneous transactions between people and companies, available to all banks.

Then, just last week, the US presidency launched an investigation considering Pix an unfair trade practice against the US.

Actions like that may show the current direction of the US government is aligned on preserving status quo. But still, I wonder how impactful a public digital infrastructure for the dollar would be.

I got in this thread with the expectation of seeing a comment like yours, so thank you for that.

I think what worries the U.S. more is the likelihood of Pix spreading around the world. It’s such a great public program that I believe many countries will eventually adopt it, or adopt some version of it. In fact, AFAIK some places already have it, like Thailand and Malaysia.

Consumers like it because it is widely available and free, companies like it doubly so, and even governments like it because it helps to combat tax evasion and fraud.

Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants. But I believe even that will change in the future, to the benefit of Pix-like systems.

> AFAIK some places already have it, like Thailand and Malaysia.

Also Vietnam (Napas247), Singapore (PayNow), Philippines (QR Ph), Japan (lots different systems), China (WeChat/Alipay, I think?), Russia (SBP), Belarus (ERIP, in a sense), and the whole of EU (SEPA transfers).

One problem is, most of them don’t really work for you if you’re a foreigner. Moreta (YC S24) is doing something in SEA, and I’ve seen another service for visitors in India, but I think exchange rates wouldn’t be too good (compared to something like Wise, maybe on par with regular banks though).

https://moretapay.com/, https://ale.sh/r/moreta (affiliate link)

https://wise.com/, https://ale.sh/r/wise (affiliate link)

The EU is also now pushing WERO

https://en.wikipedia.org/wiki/Wero_(payment)

That's a commercial service backed by some European banks. It's not at all comparable with a non-profit service like Brazil's Pix.

The closest EU equivalent would probably be the planned digital euro, but the banks are fighting tooth and nail to prevent that.

Not only that - ECB, EU Comission / Council also supporting it.

Though, most of the shares belong to major EU banks, yes.

Isn't that (and its predecessor iDEAL) basically a layer on top of SEPA transfers though? (not that that's a bad thing)

Kind of, but with easier UX - because a SEPA transfer, which is free and instantaneous, still requires the sharing of a bank account number, while Wero works with QR codes, phone numbers, etc. They're also planning to expand it to NFC payments and online payments.

India has UPI (Universal Payment Interface) for instant free transfers. They are working with Singapore to integrate their payment systems so that people will be able to send remittances instantly across the countries.

Yeah, and some of SEA payment modes already do cross-accept each other actually.

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants.

This is the entire value proposition of credit cards and is what undergirds the issuer (bank) justification for interest rates assessed. To be able to defer card-holder immediate payment for some period of time and/or to put the onus of proof-of-purchase on the merchant instead of the card holder.

The last point is non-trivial when considering debit or debit-like networks result in funds being transferred during settlement (often performed daily), thus making the customer responsible for proving they did not perform the transaction post hoc.

I am in Thailand. Fraud is a much smaller issue because it’s a push-based system. You cannot withdrawal from someone else’s account just by knowing the number, unlike with credit cards.

What about fighting charges? In the US, if I flag a charge on my credit card it's immediately cancelled and they deal with it.

How does that work?

They way it works I don't receive a charge like you do with visa, the merchant presents a code, you scan it when your bank app and then the bank app asks if you want to send # of money to [merchant name], if you don't want to pay it then you don't approve the transfer in your app on your phone.

However after the fact there's less options, I've never gone through

Bundling consumer protection with the payment system was always a bad idea. Payments need to be instantaneous and free.

The returns/refunds can be handled offline by a mutually agreed facilitator that does not have a monopoly on the payment system. You can also have a legal mandate that all internet purchase, for example, should employ such a service, that charges a market fee and is then liable for making fair decisions.

It is not a bad idea. This is how it is supposed to be. My bank offers this even with Mastercard. I have to approve transactions when paying online. It's instant, I finish checkout, and then I receive the push notification asking me to confirm the transaction. I don't know if I would ever use CC in a country where banks don't allow this.

Consumer protection can still be separate in this case. That's not a problem at all. The only reason it is not prevalent in these countries yet is because they in general have lax consumer protection laws. But this can easily change. The unified payment interface does nothing to exclude it.

That's not really what I asked.

What happens if a fraudulent charge happens?

If payments are always approved by the payer with their PIN / FaceID, then the idea of a fraudulent charge is just undefined.

Like you hand cash to someone. The transaction is done at the moment money changes hand. You don't get to call someone to snatch the money back to you against the payee's will.

For online purchase, for example, buyer pays the marketplace (e.g. taobao.com) to temporarily hold the money -> seller ships the goods -> buyer confirms goods are received -> marketplace pays seller. If there is a question, you take it to the marketplace to sort things out according to marketplace & seller policy. Either way, the payment provider doesn't concern itself with any of this - it only routes money according to payer's request.

In the Netherlands, possibly more of Europe, you can do a chargeback ("storneren") on automated deductions, which can be used in the case of conflicts, e.g. a company withdrawing money from your account even though you cancelled a subscription.

It does not work as seamlessly as CC w.r.t chargebacks.

What a lot of folks do is they pay for most purchases with UPI but try and ensure there is some kind of "undo" button somewhere for large purchases. If I am making a purchase on a shady website, or making a large purchase, I will pay using CC so that I can chargeback and the CC company will deal with it. However, even if I am buying a laptop or whatever on Amazon, I know that amazon will deal with returns and stuff properly, so I would just UPI it. There is also the matter of credit card offers and points and what not. If there is a good discount then CC is used.

Not well is my guess. You best treat it as a cash equivalent, because it's a push method.

What happens when it's so easy and people start abusing this system?

May be related: Discover refused a charge back from when Walmart sold me invisibly unusable food in a sealed container and was creating bureaucratic hoops to return it. They told me that they blanket deny all charge backs for food.

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank

It will not take long. Banks are already offering products with credit on top of the Pix. Furthermore, contactless Pix is now available in Android phones. If we look from the financial and usability aspects, Pix will continue eating the credit card market share.

I didn't know Thailand and Malaysia had similar systems, though. I hope the example spreads! Creating a competitive infrastructure and product is an interesting way to deal with monopolies.

About half of the world population has access to some sort of QR based payment system nowadays.

India has UPI, China has Ali and Wechat pay. Almost everyone in these two countries can go weeks without having to use cash.

In South East Asia, Vietnam is leading QR payments. I live in Ha Noi, and I only carry VND equivalent of $15-20 with me, and it sits in the wallet for ages. Everything from gas stations to restaurants to street vendors to even paying taxes, you do it from a QR code. There is no wallet, the money is directly debited from the account.

Thailand, Singapore, and Indonesia have similar systems. In Indonesia, a couple of "super apps" had their own wallets, but merged with QRIS a few years back, a lot of Indonesian people can now pay with QR codes, even across wallets and bank accounts.

South America and Asia has already started to replace card payments with the QR payments. Rightfully so.

Europe (41 countries) has instant SEPA.

SEPA is a banking infrastructure layer and it is not consumer focused. Also, only ~60% of European banks adopted it. While Pix was mandatory for all banks to adopt and 80% of Brazilian population already used it.

All banks in Euro (currency) countries have adopted SEPA. You might be thinking of SEPA Instant Payments, which is more recent and adotopion isn't universal yet.

I believe the Singapore, Malaysia and Thailand ones are linked too, I noticed last time I went over to Malaysia that they could accept the Singapore PayNow payments too.

>" the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank"

I am not sure it is a better proposition if one looks at staggering amounts of debt caused by credit cards

You don’t want to spend money you don’t have? Congrats, your credit score is trash and now you can’t rent a house (let alone buy).

You're not forced to use credit cards irresponsibility to benefit from the credit score boost they provide.

Sure, but you have to play the Visa/MasterCard game. We allow them to rule the country so much that if you’re not an active customer of theirs you can’t get a roof over your head. I don’t think any other company in the world has that much power.

Do you mean via credit cards, or on the whole, including a mortgage? We have a mortgage, but have made all but 1 or 2 credit card payments in 20+ years - we forgot to pay a $50 bill once, IIRC. Outside of the mortgage, we've never spent money that wasn't already in our bank account - not even "it's coming in our next paycheck". Our credit scores are fine.

I mean just credit cards generally. You have to play the MasterCard/Visa game or else lenders won’t rent to you. I’ve been denied many rental properties I could very easily afford because “oh someone else applied and their credit score was over 800”

Only in the US, building Credit isn't as important in other countries AFAIK.

You can pretty trivially set credit cards to auto-pay and use them as debit cards, with the only difference being a delay in any overdraft penalty.

Sure, if you overspend you get heavily penalized, and that's not great, but you don't have to spend a dime of interest to build a respectable credit score.

Again, you’re being forced into playing the Visa/MC game.

That's only in the US. The few other countries that have credit scoring mostly have negative scores (basically, a lender can check if a prospective borrower has failed to pay loans/taxes/etc. previously). And it is only restricted to lenders.

It's a much better system than the dystopian American one where prospective employers and renters check your score, which is built based on a ton of relatively private information, to determine if you're worthy of renting or working. And people have to game the system by minmaxing credit cards to be able to have the chance of renting or even working. It's utter nonsense that doesn't serve anyone other than the credit card companies and credit score bureaus.

Cut the BS please. I do not have to use CC when I do not have money and still have perfect credit score. Personally I do use my CC only when there is no other option and I pay it off immediately after making a purchase. My credit score is perfect and I've never spent using CC more than I have on my account.

You’ve been playing the Visa/MC game for 20+ years to achieve a perfect score? You might then agree they have an overly large amount of influence in life?

Pix, UPI, etc are nationally silo'd and have little risk of spreading around the world. They took over their respective countries because they were government backed and mandatory.

The US has its own version of this: government backed, 24/7 instant settlement payment rails (called FedNow). It released in 2023 but adoption is slow because it's not mandatory. Banks are especially slow to support "Requests for payments", which might compete with card networks for retail purchases.

It's the banks, not Visa / Mastercard, that make the most off credit card fees. Visa / Mastercard take .1-.2%, the bank takes ~2%.

The other unique bit about the US is we have uniquely strong consumer protection laws and a uniquely large amount of fraud. Irreversible payment rails are a nightmare for consumers who are used to chargebacks being built in to the payment rail, and banks are skeptical of exposing such rails to consumers because most of the time the banks are required to make good when the customer is defrauded.

UPI & RuPay are not mandatory, they are completely optional.

Citizens and travelers in India can pay by cash, card, UPI or NetBanking to make offline or online payments. A new or existing customer or a Bank can randomly get (and can anytime request for a replacement card) to Bank to get the ATM/Debit card as RuPay, Visa or MasterCard card. So RuPay card is optional too.

But nevertheless, the technology stacks behind UPI and RuPay have been built to be so versatile, scalable and robust that they now account for 85%+ debit & payment transactions in the nation! India is rapidly heading towards a cashless economy!

Due to the interoperability, scalability and resilience in the technology stacks for UPI & RuPay, these brilliant solutions are now being sought after by other nations, who are eager to buy and leverage these tech stocks to implement their own branded payments systems that will replace Visa, MasterCard, Amex, etc. in those nations.

e.g., UAE has tied up with NCPI (Indian government organisation that implemented and manages UPI & RuPay) as a tech license deal and UAE has already started its own implementation of RuPay, which it has branded as Jaywan. So the Jaywan Debit cards are alternatives to debit cards from Visa, MasterCard, Amex, etc. in the UAE.

The other unique bit about the US is we have uniquely strong consumer protection laws and a uniquely large amount of fraud.

This has nothing to do with instant payment. Lets say $1000 is lost from your checking account due to fraud then is it covered by visa or mastercard? consumer protection there is different.

With SEPA or UPI it is irreversible but it is the same like you ACH transfer. If you do a mistake then it is irreversible.

Some people here talk about Amex, VISA or mastercard giving free damage insurance on purchase of consumer items like phone etc. That is not consumer protection. That is more like one gets this free insurance for paying yearly fees or maintaining account.

Another reason for fraud is the use of magnetic stripe based card readers.

> The other unique bit about the US is we have uniquely strong consumer protection laws and a uniquely large amount of fraud

I'd certainly dispute the former part. Strong, in a subset of cases. But chargebacks are still, ultimately, a he-said-she-said a lot of the time, and it's very easy to find abuses of it. Not to mention, merchants who blanket ban and revoke access to purchases because of even legitimate chargebacks. There's little recourse for that other than arbitration, generally, if that.

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants. But I believe even that will change in the future, to the benefit of Pix-like systems.

Does Pix offer something like credit card rewards? I understand that you ultimately pay for this through fees that make prices slightly higher, but it is still an incentive to use credit cards over other payment methods.

> Does Pix offer something like credit card rewards? I understand that you ultimately pay for this through fees that make prices slightly higher, but it is still an incentive to use credit cards over other payment methods.

No, because it's free, there is no high transaction fee to pay for those rewards. And that's ultimately better.

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants.

Rewards is another big one and the reason I personally prefer to use credit cards where possible.

Rewards exist because credit card transaction fees to merchants are very high, though. Europe put a limit on those fees and no credit card rewards exist here.

Interesting you're saying that, because my usage model is: US credit cards w/reward points, in Europe. The cards I use have no currency exchange fees, and very good transaction rates (€ to $), so other than the unavoidable (majority of my money being in the US) ups and downs of value of $ vs € (great up to six months ago, degrading since the arrival of the new admin in the US) I get the best of both worlds, i.e. European lower COL, and rewards and services (e.g. car rentals and insurance, flights, hotels, etc.) from use of US credit cards.

Sure, but for those of us in North America, it's still a draw. That said, I can see that the consumer would potentially be better off if fees went down, prices dropped, and rewards went away. But that's probably not a realistic future.

The unfortunate reality is that even if fees disappeared tomorrow, most merchants would just keep the current price and pocket all the extra money as profit.

India has UPI. China has something. It is only a good thing that this should spread everywhere.

Fairly sure QR code based payment systems are pretty common outside of the western world since China popularized it. You cam even hook your credit card up to something like Alipay and get by with minimal extra fees.

Haven’t the Eurozone and presumably many other places had this for quite some time now? Or is Pi. somehow better than SEPA?

There is UPI too in India, pix also sounds decent! Pardon me but I think pix is open source too which is nice too !

In Argentina we have Mercado Pago which is basically this.

It is not the same. Mercado Pago is a product from Mercado Livre and charges at least 0.8% per transaction.

Transfers from a bank to another and between banks and/or digital wallets (like MercadoPago) are free and almost 99% of time instant in Argentina

The transfer system is like that due to government regulation

If you transfer between accounts is free.

My understanding is that Pix took over because the Brazilian gov did transfer payments during covid and the (only?) way to get those payments was via Pix. So it forced everyone to start using it. And once people had more familiarity with Pix, merchants started pushing for it because it charges ACH level fees.

The chargeback system (MED) is only so-so right now, but expected to get better.

There is a lot to like about Pix, but the spec is extremely complicated and hard to implement.

I started using Pix, because it's the best way to do business with Chinese ecommerce sites.

You don't have to give your credit card details and refunds go straight back to your account.

In fact, it really impressed me that Aliexpress got it working before many Brazilian sites.

If you use an intermediary, implementation is usually very simple and straightforward. The biggest challenge is becoming a direct participant—that is, communicating directly with the central bank. In this case, you need to enter the regulatory framework and become a payment institution.

There are plenty of companies in Brazil that offer PIX payments to foreign e-shops. Valve has been accepting PIX for some time now, for example.

Can you suggest some?

Many banks and Fintechs here offer this, the trick is that you need to open a local office, so you have a Brazilian subsidiary with a CNPJ number in order to open a bank account and receive the money.

Pix blew other kinds of bank transfer out of the water. TED, DOC, Boleto, were slow and expensive. Pix is instant, free for most people, and just works.

No, the Central Bank of Brazil did not force any person to start using Pix.

Also, care to elaborate why you think the spec is complicated and hard to implement?

Coerce is likely a better word.

Pix and OpenFinance are extremely chatty APIs with a ton of rules. Being a merchant using the ecosystem is not that bad, but trying to be a participant in the network is complicated.

By the way, for those that want more context on Pix a good place to start is this BIS Bulletin: https://www.bis.org/publ/bisbull52.pdf

It is total corruption through Visa/MC of our political system in a way that people really do not understand. That is who and what would be affected. You can’t even get anyone to propose a bill to create a digital payment processing capacity just like how the government issues currency. It has been the hijacking and takeover of the most fundamental task of the government, issuing currency.

Does the Central Bank of Brazil publish data on the cost of running the network and how it is funded? Or is there a hidden tax that eventually makes its way to the customer in order to keep it going? Nothing is totally free. Who pays for the infrastructure costs, not to mention the legion of humans that it surely takes to maintain the network? Pretty sure that no matter what is published publicly, someone is paying for it, and that cost is being passed around the logistics chain and ends up on the prices of the products you buy. Sure, it may be much cheaper, but it's not totally free.

It costs up to ~$9m per year, processing 63 billion transactions per year: https://oglobo.globo.com/economia/noticia/2024/10/03/bc-gast...

Banks pay a small fee (less than a cent) per batch of transactions.

Pix is free for natural persons and individual entrepreneurs. For businesses, receiving is free, but they pay a fee to send money[0], this can vary from one institution to another.

[0] https://www.contabilizei.com.br/contabilizei-responde/taxa-p...

If the central bank offers it, it would be the equivalent to cash. Cash is also expensive to maintain and issue. Do you ask all the same questions as who pays for cash?

I'd like to see a system like that that also integrates taxes. That is, it tracks total income for each payee each year and deducts taxes based on the appropriate tax bracket. It should also support sales tax and state income tax. That way, all that you need to do is appropriately mark the transactions and tax compliance is done. You could even mark business expenses in it and have deductions automatically processed.

Someone could lie about the nature of their transactions, but that's called tax fraud and it's already possible and we already have mechanisms to deal with that.

Can anyone please steel man the opposition argument for Pix?

You can’t create a moat to skim 3% of the economy as a for profit venture.

The brazilian government can choose to start taxing every single pix transaction at any time. Due to the electronic and centralized nature of the system, such taxes would be utterly inescapable. The only thing stopping them is the sheer unpopularity of such an action.

It's already being used for data cross referencing, tax collection and investigation purposes. There are plans to implement into these payment systems pretty much everything that cryptocurrency maximalists warned us about. It's a convenient system but at the same time quite dystopian.

This argument works against all payment systems that are conceivably bannable (likely all of them). If a payment system doesn't collaborate, the government can ban it.

> The only thing stopping them is the sheer unpopularity of such an action.

This is the intended functioning of democracies I guess.

Nothing stops US government from doing the same to Visa/MasterCard networks.

Not really coming from the US gov but it already happens in very weird ways:

https://www.pushkin.fm/podcasts/hot-money/episode-8-inside-p...

FWIW credit/debit card transaction fees are capped in the EU/SEPA, to 0.3% for credit and 0.2% for debit. 3% is absurd.

Minor annoyance, but just a few limitations and restrictions, after all you need a smartphone and internet connection.

So.. when paying in a store, you need to open your banking app in your smartphone, and if you’re in an area with bad cellular connection (inside a few buildings or in a countryside), you need to connect to the store wifi. Only then you can scan the store QR code and make the payment.

So a single payment can easily take a few minutes, as opposed to a contactless card payment which takes a few seconds.

My main issue with pix is the even more reliance on a smartphone for our day to day life.

From the comments it seems that it is essentially the same as using cash as far as no buyer protection if you want to challenge a charge like you can with a credit card.

I'm not a big fan of crypto but I've always wondered why the US wouldn't want to create a highly secure private coin that's pegged to the dollar. I mean you put a very small transaction fee on it (can be far less than Visa's 2%) and you're suddenly generating revenue from tons of global transactions, benefiting from the status of the dollar being the global currency. You even get to "tax" illegal transactions, and as a consumption "tax". It would only work if it was highly private (effectively like cash) as no one else wants to be handing all that data over but it still sounds like it would be a big win to many parties (well not the authoritarians? Maybe?). Everyone will be "banked", you get digital payments everywhere, and you even probably reinforce the reliance on the US dollar. Is the demand for control so much greater than the demand for money combined with providing a public good? I know there's still challenges to resolve but a guy can dream, right?

You're describing a CBDC, not a coin. Why isn't it being done? Because commercial banks are vehemently against that. The current administration in particular will never go against the big banks.

If that's the word, then yes. Thanks, I'll update my terminology.

As for the government, I'm sorry, I thought I acknowledged that point. Though I also don't think we should just take it and give up.

Because highly secure coin wouldn't allow the government to track money.

I firmly believe that the Federal Agencies do not fight bitcoin exactly because it is so easily tracked.

My bad, I thought I acknowledged that issue

> Is the demand for control so much greater than the demand for money combined with providing a public good?

Yes. Also the current administration is hostile to public goods as a concept.

The politics around this is very weird. The US is basically regularizing "stablecoins" as electronic dollar-proxies while banning central bank digital currencies which the Fed has never planned to do. Basically to ensure all the profit and privacy risks stay in the private sector.

Because nobody needs a cryptocurrency when you have a centralized trusted broker.

Another commenter pointed out that the correct term for what I'm suggesting is a CBDC, which, yes, uses a centralized trusted broker. Which I personally don't care if it is a centralized ledger or a distributed ledger, as long as it is actually private (a-la zcash ZKP or something similar)

So like Circle's USDC Circle Payments Network?

Is Circle private? Their whitepaper is very lacking in that department...

> I wonder how impactful a public digital infrastructure for the dollar would be.

The future digital dollar is being quietly sabotaged as the current administration realizes that crypto isn't just capable of anonymous bribery, it's the ideal medium for it.

People don’t really believe me when I say I went to the U.S. and had to sing the national anthem every day in class.

There’s no other place that protects its companies so fiercely, meritocracy be damned.

Great for investors though!

American corporations have never been shy about using the might of the US government to protect their own interests. USTR's "notorious market reports" is a nice example. "Our stakeholders" want this, "our stakeholders" are concerned about that. It's a huge list sovereign nations get onto when american corporations don't like them. They put Canada on that list at some point.

I fully expected Trump to attempt to leverage the Bolsonaro trial into economic advantage but it was pretty surprising to see him take issue with pix of all things.

FedNow is still a thing, at least for now.

How do I use FedNow to buy things from merchants?

it's important to note that Pix took over Brazil because it was mandatory. The US Federal Reserve built equivalent infra: FedNow, as of 2023, is the rails for instant settling, $.04 bank transfers. But adoption is meh

It's totally unfair that they don't get a cut from other people's business. /s

The credit card duopoly is another instance where the EU has done a good job with regulation, but everyone just takes it for granted until they’re reminded how much worse the rest of the world has it.

In the EU, card payment fees are capped at 0.2% for debit cards and 0.3% for credit cards. In the US, these interchange fees are about 2%.

US businesses pay over $100 billion annually in these fees to card networks. If the fees were capped like in the EU, 85% of that money would stay with the businesses rather than feed the duopoly.

The EU (the ECB) is actively working towards a system similar to SEPA (Single Euro Payments Area) but for cards [0]. This would enable card transfers to also become faster (SEPA is instantaneous even cross-border within the EU) also allow for operations not depending on Visa or Mastercard.

There is a major EU effort to develop an alternative 'instant payment' system that doesn't depend on Visa or Mastercard called Wero [1].

[0] https://www.ecb.europa.eu/press/pubbydate/2019/html/ecb.card...

[1] https://wero-wallet.eu

I had never heard of wero, despite living in Belgium and having been actively involved in fintech. Android also tells me that the app is not available in my country.

Sounds like it's supposed to replace Payconiq (which is currently the biggest mobile payment service in Belgium).

The fragmentation of payment services is starting to annoy me. I can use cash or cards everywhere in the eurozone with 100% compatibility. But every handful of banks in every country has decided to create their own payment "solution". Typically using Android & iOS apps that require an insane number of permissions (including location and wifi connections!?).

Looks like wero is just more of the same. Another non-standard that's only supported by a handful banks in a handful of countries. And I'll bet it won't work on rooted android devices, and that there won't be a web version.

At least it's built on top of SEPA Instant Payments, which is a step forward...

I believe Wero is just a service (doesn't have an app or anything like that). You'd activate it from your existing bank's app. For example, the KBC app has a Wero icon you can use to enable payments via the system.

But generally I agree it's not an ideal situation and I fully blame Apple for the current state of things - all QR-code based systems (payconiq, Bancontact, etc.) could've been avoided if apps could provide payments and access NFC from the start but here we are.

There is also the Digital Euro project. Though no timeline exists yet.

https://www.ecb.europa.eu/euro/digital_euro/html/index.en.ht...

wero is a private company, from Belgium, not an EU initiative.

In the same vibe you have Lydia in France that is successful.

I think the EU calls for a decentralised approach with multiple cross border providers.

Wero is technically from Benelux as there are origins in Belgium, Netherlands and Luxembourg. There are also other initiatives in Estonia, Finland, Sweden, Denmark, … to create alternative card payment system that is also resilient to internet failure.

0.2% should be about the correct rate. WeChat in China has zero transaction fee in the system and a 0.1% fee on withdrawals. Visa/MasterCard amounts to a private tax on the economy. Unfortunately I don't see this changing anytime soon, since the US allows rent-seeking middlemen like Visa/MC, TurboTax, and PBMs (pharmacy drugs), to continue their operation as long as they keep funding the right politicians.

As far as I understand with WeChat you can't disputes purchases and do things like chargebacks. If your phone is somehow stolen and account drained (they'd need to know your pin..) then you're probably be screwed?

So there isn't the concept of insurance as far as I understand.

Not to defend the credit card companies in the slightest.. but its a bit apples to oranges

EDIT: Arguably "insurance" is actually an artificial problem creates to justify the cards' fees. The intentionally didn't implement CC chips for the longest time, insisted on signatures, and now support insecure things like contactless payment - thereby ensuring theft/fraud still exists and necessitating insurance (for a very marginal increase in user convenience)

The only plus side I can see is that you can buy stuff from shady ass websites and sleep comfortably knowing you can do a chargeback later.

What are UnionPay's fees? That's the correct comparison, not WeChat.

PayPal/CashApp have zero transaction fee as well for person-to-person transfers.

People always cite the first-order benefits of this regulation but don't look into anything else. To be clear, I haven't either but what I would look for is: - are real prices cheaper for consumers? - is economic activity higher or lower (i.e. maybe credit cards encourage purchases?) - does making credit cards a less lucrative business lower credit card penetration? - is lowering credit card penetration, particularly for people bad at doing interest math a good thing? - is making cash or debit cards relatively more appealing good?

My vague impression is that the studies on these questions are mixed (am I wrong? A quick Google found several EC funded ones which I'm a little suspicious of). Note that the US has 4 credible payment processing networks but the fees have remained constant. My suspicion is that 3ish% is the optimal value or a very large anti-trust investigation (not a price cap) is in order.

They're set at whatever the payment networks can get away with. There's nothing that says that's good for anyone else, although it is very good for Mastercard and Visa.

There are several ways to reduce costs underlying payments. One is better IT. Notice that IT infrastructure has improved and dropped in cost by immeasurable amounts since those 3% fees were first instituted. Another way is to reduce card fraud. Notice that we’ve had excellent solutions to many types of fraud for decades now, but online shopping still requires us to enter 16-digit easily-stolen numbers into websites, and so fraud is enormously higher than it needs to be. With biometrics and modern smartphones, in person fraud should be very low.

A better way to look at these networks is to understand two things: the first is that at one level, they’re an insurance business that makes a profit from insuring against fraud, and reducing fraud would reduce the profit margins they can make from that business. And a second way to understand them is as guardians of a hugely profitable network portal that’s very hard to compete with, and they’re charging as much as the market can bear for that service.

> online shopping still requires us to enter 16-digit easily-stolen numbers into websites, and so fraud is enormously higher than it needs to be

EU partially solved this with PSD2 enforcing two factor authentication for online card purchases.

https://finance.ec.europa.eu/publications/strong-customer-au...

I've noticed that I'm getting fewer and fewer 2FA requests with my 3DSEcure enabled VISA card of late. Places I frequently order from no longer trigger 3DS. Sometimes new shops don't either. From what I understand, whether or not the second factor triggers depends on a variety of factors including amount and retailer reputation.

They added a "frictionless" flow in 3-D Secure v2, so probably for situations like "we recognize this combination of device and payment card and the transaction is pretty small" it can slide you through without a direct interaction.

I think some interpretations of the PSD regulations call for specific "after X euros of spend/Y transactions you have to explicitly challenge" but it may vary by country.

> They're set at whatever the payment networks can get away with. There's nothing that says that's good for anyone else, although it is very good for Mastercard and Visa.

MasterCard and Visa are more like clearinghouses. The decision makers are their members having "access to the rails", issuers and processors, which are either banks, subsidiaries owned by banks, or companies sponsored by the aforementioned two (which very often includes one or more banks getting an ownership percentage).

> My suspicion is that 3ish% is the optimal value or a very large anti-trust investigation (not a price cap) is in order.

Why do you have this particular suspicion when you claim you haven't actually looked into ~any of the questions you raised?

> does making credit cards a less lucrative business lower credit card penetration?

It doesn't, EU uses card payments much more than the US. So end of discussion there, it got cheaper with no negatives, just positives.

That's false. It's 66.7% in the US. Only Iceland, Luxembourg, Switzerland, and Norway are higher.

https://genderdata.worldbank.org/en/indicator/fin7-t-a?gende...

(also, you answered - incorrectly - only one of the questions that I brought up)

That doesn't include debit cards, most people don't want nor need credit cards. I can count on one hand the amount of times I have seen people use cash the past year, basically everyone uses cards.

We have VISA and Mastercard with debit, not credit, so it works everywhere.

Sure, but the question was specifically regarding credit cards, not debit cards. In which case, they would be correct in that penetration is appears lower for credit cards in the EU no?

Note, I am not suggesting that is a bad thing, I fail to see largely how its a bad think but perhaps I lack enough understanding to see why people not loading up on credit cards is a negative.

> Sure, but the question was specifically regarding credit cards, not debit cards. In which case, they would be correct in that penetration is appears lower for credit cards in the EU no?

Yes, but that's because credit cards aren't needed in the EU (you don't need to build credit, and you get the same protections on both). So it's useless to try to focus on credit cards in particular, it only makes sense to consider debit+credit.

I think that there's very little reason to suspect that a rent-seeking middle man getting a bigger piece of the pie is in any way good for the efficiency of the value transfer system, first order or not. You're kind of crab-walking around making a point here.

If credit card networks disappeared today, would we want them back? If the answer is yes, then they deserve a fee. Unclear to me why a certain % is morally correct.

The correct % is the minimum amount required to sustain the service.we know what that amount is from countries with sane regulation.

Oh come on. You are going to debate whether a 3% parasitic tax is good or bad. Interchange is paid on debit card transactions too, it's not credit card specific.

Parasitic takes for granted that credit card companies do nothing. Anyone who works in finance could tell you that's very false.

(I'm open to the idea that this is a market inefficiency that needs government correction - but you need more than just saying "3%" to prove that)

And that is why we’ve continued to pay about 2.5-3% since the 1980s, despite the fact that every element of the card networks’ technical infrastructure and hence cost structure has radically changed since that time.

A simple way to determine whether “look, the burden of proof is on you to prove this is abusive” is the correct standard is this: try to get precise details on how much the underlying service costs, how much the various types of revenue are shared between card processors, Visa, and issuing banks. You’ll find that it’s almost impossible to get a clear picture of those details without signing an NDA. But if I’m wrong about this, come back to me with it and we’ll discuss how to use it to evaluate whether the fees are reasonable.

and along the same lines, how good is the fraud prevention, detection, and recovery?

US banks lose about 3x more to fraud than average and about 10x more than some countries with sane regulators. Those are direct losses, not accounting for "prevention, detection, and recovery" costs.

that's only a very recent change, and not universally rolled out. for decades shops charged ~£3 "connection fee" for paying by credit card, no matter the purchase amount, and many still (probably illegally) enforce a minimum spend if paying by credit or debit card. like when paying or withdrawing money abroad, it's just a lottery as to the "fees" you'll be charged not because there are such fees, but because someone in the '70s created super advanced tech to detect usage outside the country of issuance, and everyone got used to that

A bit pedantic, but especially relevant in a conversation about government-permitted monopoly power: while requiring minimum spend might be in breach of the payment networks' contracts, and may give rise to _civil_ liability (and punitive measures towards the merchants), we shouldn't use language like "illegal" that implies that government would have any interest in, or capacity for, proactive enforcement.

When we use language that evokes the mechanisms of state and implies they'd be used to enforce a monopoly power, we imbue that power with the gravity of those mechanisms, and further entrench it as a "way of life." We should be especially careful of that when said monopoly/duopoly essentially creates and enables a private taxation of the primary source of credit to many in the world!

Better words is: against terms of visa/Mastercard rather than illegal. Businesses have valid reason for minimum payment. There is minimum fee in visa or master card like 30cents or so. If shop selling candy bar for $0.5 they are loosing money if someone pay with card.

Visa and Mastercard have a net profit margin in the order of 50%. Do you think that's justified for the service they're providing, and is indicative of a healthy market/competition?

It's indicative of a healthy bankroll to fund superPACs and that's what matters!

As I remember it credit card minimums were only a thing at smaller shops but usually didn’t apply to debit cards.

Credit card chargebacks are very expensive for a vendor, you don't want credit card purchases for 1$ items.

> The credit card duopoly is another instance where the EU has done a good job with regulation, [...] In the EU, card payment fees are capped at 0.2% for debit cards

No it hasn't. The right cap is 0, like in Brazil. It doesn't make any sense to have 0% payment fees on cash and 0.2% on cards. Cash is easier to fake.

It also doesn't make any sense to be a percentage. It takes the same number of bits to transport the number 10000 as it does to transport the number 10.

Even 0.2% is essentially just a privatized tax.

That money goes to buying off politicians though. So it’s a good investment to make the American people pay for their own robbery.

Unfortunately this only applies for physical transactions. For online payments this is still around 3% - reason why stripe cannot be cheaper. Wish we had something like transferwise is a wrapper around those QRCide payments so can pay cheap internationally as well

It's a great example of how quiet, unsexy regulation can have a massive impact

Is there information on EU vs US credit limits?

How do the account fees compare between EU and US?

Most credit cards in the UK at least (same cap) have no standard account fee. Those that do come with other perks / beyond the 'world elite' etc side Mastercard/visa aren't seeing that money - its going to the issuing bank. Bank accounts also generaly have no standard fees (and a lot of other things we take forgranted - faster payments (if I send money to a friend/business I can do it instantly for free without needing a third party solution), standing orders, direct debit etc. - that make banking far easier than in the US).

There is also regulation in place that restricts predatory fee practices, getting customers into revolving debt and protection that makes card issuers liable for purchases (Section 75 - e.g. if I order something paying with my credit card and the merchant doesn't pay, the card issuer is legally liable / I can claim from them and its on them to get it from the merchant)

>Is there information on EU vs US credit limits?

I would be very interested in this as well.

My understanding is that cashback cards of the type we have everywhere in the US (e.g. Amazon Amex = 5% back on Amazon purchases, Wells Fargo Active Cash = 2% back on everything) don't exist elsewhere.

Another example: I just earned $1000 from Chase Sapphire as a new customer bonus for diverting $5K of the spending I would do elsewhere on that card over three months.

That's just your bank giving back some (but not all) of those 2+% interchange fees.

Basically, in EU you have low fees, so credit cards are boring, they offer almost zero perks (because there's no money to finance those). No one really cares about what brand of card they get, only about their credit limit. In the US you are charged high fees on every purchase, and then the bank uses your own money to bribe you, or encourage particular types of (excessive) spending, or just make you addicted to credit card debt.

I have been using US credit cards for years, all over Europe, taking advantage of points/rewards/car rental insurance/money back on challenged purchases, and I pay no more than the Europeans with their debit cards, be it services or products. And I pay the entire balance once a month, from a HYSA US account, thus making a little interest on that part, also, rather than debiting at the time of each purchase, from my non interest bearing European account

>That's just your bank giving back some (but not all) of those 2% interchange fees.

On the contrary, for someone like me who pays off my balances each month, if I get 2% back for every transaction, I am breaking even on those fees if assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that. So really, I come out slightly ahead.

For something like the Amex I mentioned with its 5% back on Amazon, I am coming out well ahead.

> and then the bank uses your own money to bribe you, or encourage particular types of (excessive) spending, or just make you addicted to credit card debt.

Oh, good grief. So EU credit card companies don't do this? I had no idea they offered cards purely as a charitable venture.

I love how you stacked up all those sins just on the US side. Keep this sort of /r/AmericaBad nonsense out of HN.

> So EU credit card companies don't do this?

No, as I said, they don't because of the interchange fees limit: they simply don't have money to finance any perks. Sometimes you get travel insurance, with the card that charges 200 EUR annual fee, sometimes you get some rewards program, where you collect the points, but those points are typically valued at 0.0001 cent, so no one really bothers earning them. Credit cards in Europe are really boring, commodity products, not status symbols or coupon books.

> assuming that I pay 100% of the fees, which of course isn't true; the merchant pays some of that.

You are paying that one way or the other: merchant will pass their fees on you by raising prices.

Varies by country, but yeah, in general Credit Card options in Europe are pretty bad, here's my research on options in Spain:

Sabadell: No fees no perks for CC

Bankinter: No fees no perks for CC

Ing: No Fees no perks for CC

BBVA/Santander: Offer an Iberia cobranded card, 9k avios on 2k EUR spent on first 4 months, Iberia Silver Status, 1 point per 3 euros spent, 90 EUR annual fees

Caixa: Vueling card, slightly better avios earnings than Iberia card, some minor vueling perks, fast track at airports 90 EUR annual fee, also a Lufthansa card that offers 7k bonus miles, 95 euros annual fee, no info on miles per euro spent

Amex: Only worthy option, 1 mile per euro, 80k welcome bonus, unlimited lounge access, 400-500 euro credit welcome bonus, 250 travel bonus(used to be flights/hotels, now just hotels), fast track at airports, 780 euro annual fee, network in Europe is growing but I'd say still not accepted at places 50% of the time in Spain.

Revolut: Ultra could be the only comparable option to Amex that it offers unlimited lounge access and 1 point per euro at 660 euros annual fee

So yeah, the only option that actually gives you something is Amex, as the Iberia/Vueling options are laughable and the only reason why you'd have the free CC from other banks is because they are free.

> Sometimes you get travel insurance, with the card that charges 200 EUR annual fee

Why would someone pay EUR200 each year for that credit card, then? Why does it exist at all? The only US credit cards I know of that have fees have fees because of their (huge) benefits.

You, of course, pretended to not see my pointing out your laughable math regarding fees versus cashback even though I said up front that I get 2-5% back.

When the 'merchant pays those fees' how do you suppose they are paying them? I will give you a hint for free: it's not a special bank account that says 'definitely not paid for by my customers' on it.

Of course. But that is the case for all fees, taxes, surcharges, etc. Money is fungible. There is always some amount of give and take in terms of whether "they" or "me" is the one paying the tax bill/tariff bill/etc in terms of the bottom line.

Given that, and given the necessity of there being some amount of fees to support the credit-card infrastructure, the question for a consumer like me is whether I come out ahead on balance. I can pretty clearly say that I do for the Amazon Amex, and believe that I do for the Wells Fargo.

For standard credit cards in EU it’s mandatory to pay the full balance every month. And it doesn’t cost anything, there are no interest rates. Not sure how much banks profit on it, if there’s even a profit.

I think most banks only offer if because customers needed credit cards to order stuff on the internet. Before that they were very rare here.

Edit: I meant the credit is free but I pay like € 2 / month to have my card. So maybe that’s their profit.

That's a card with a $800 annual fee... And the Amazon Amex requires a Prime membership, so you are paying at least $140/year for that card.

Credit card companies aren't stupid, they offer a few loss leaders but they make it annoying and time-consuming to come out ahead. And most of the big perks are one-time only, they have gotten much better at banning "churners".

> That's a card with a $800 annual fee

Not my Sapphire. $95. Undecided on whether to keep it or change to another type (I'm not a churner, so 5/24 is not relevant). Also undecided on whether to keep the 100,000 points sitting in the rewards balance for the time being, or cash it out to the aforementioned $1000 now.

they can (and do) change the value of points vhenever they want, so better to cash out asap

I was really surprised that it was normal to have account fees in the US. In the UK banking is free, at least until you hit an overdraft charge. They even made Bank ATMs fee free whatever bank you are with around 2000 (non bank ATMs still have a charge.)

If you pick the right bank, you can get the same deal in the US.

Actually, you can get no fees at any ATM

schwab has no fees at any atm globally :)

Other than Amex for airline points I don’t spend a penny on banking, all the standard services (eg transfers, bill payments, cash withdrawals, deposits) are free (in the U.K.) with no monthly fee.

I pay 3€ per month to "Nordea" for "unlimited" accounts and one VISA debit card.

My banks pays me more than that per month to use their debit cards.

So are you the product at your bank or why would they pay you to use their services?

Fractional reserve banking. Banks would even pay interest on money you had in your account in times past.

And then the fact that banks and card companies are charging merchants a fee for transactions and have margin to give back some of those fees to the customers.

I still get interest, it's really bad though. And the transaction fees are very low here (someone said 0.2% but I don't know) which should cover a lot of infrastructure, fraud and such.

India has had UPI since 2016 now and recently overtook Visa and Mastercards global transaction volume with 650 million transactions per day [1]. These payment processors seem to be basically levying a 1-3% tax on a nations entire GDP and enforcing their own ideas of what transactions should or shouldn't be allowed. With UPI and Pix etc. paving the way and showing its possible, it actually sounds insane to give so much money and power to some private company that provides a worse product, for nation-critical infrastructure.

[1] https://organiser.org/2025/07/22/304055/bharat/a-fintech-rev...

First things first — this is correct. As a matter of fact, the Brazillian Pix - which gets much more “eyeballs” on places like HN, are much newer than UPI and UPI was one of the inspirations, if I may say so, behind it; and it dwarves in scale. Not to mention UPI is designed to be decentralised (almost decentralised).

Fair warning (pc, please know that I am not targeting you) about the URL pc has shared - it’s literally the mouthpiece of India’s ultra right mothership org (it’s literally called that - mother org - RSS) which is affiliated with BJP (in fact practically BJP, the authoritarian ruling party, is a branch/child of this org). And they are known for omitting and distorting history and context.

Here you go - some alt sources -

https://en.wikipedia.org/wiki/Unified_Payments_Interface

But UPI is a product - real deal comes from here https://en.m.wikipedia.org/wiki/National_Payments_Corporatio...

These sources and alt sources also will highlight the history and thinking behind all this.

Like or dislike this Govt (tbh: I clearly fall in latter bracket) but I think payments is one arena (among many) where India is going really great and there many great things lined up. Luckily India is in a position right now to deliver a loud and unequivocal “F— You” to efforts from entities like MC/Visa when they try to assert their “birthright” of monopolising the world.

This is disgusting. Calling the biggest democratic party as authoritarian is nothing but disgusting.

Why do you people think you and your opinions are better than majority?

https://www.internationalaffairs.org.au/australianoutlook/in...

https://thediplomat.com/2025/04/modis-india-is-a-dangerous-p...

https://theprint.in/opinion/authoritarian-streak-among-india...

https://www.lemonde.fr/en/international/article/2024/07/04/m...

https://www.sciencedirect.com/science/article/abs/pii/S00167...

This isn’t a fringe view or “disgusting”

So you counter a politically leaning site link, by sharing politically leaning site links, duh.

The Diplomat and ThePrint are infamous for fake news and skewed stories, and for anti-India Hinduphobic content.

I guess you found it hard to find any pro-India site to link on a sub-topic about India's most popular payments system?

And oh by the way, you should search for UPI on those sites you linked. They praise it too!

Congress which western countries and liberals adore was the only party ever imposed emergency. Same party which divided the nation and left Hindus to be mascaraed in Pakistan and Bangladesh. Same party made changes to Constitution.

Why the hack has not population exchanged happened in 1947?

If minorities are afraid to live in India, why don't they move to the country that they got in 1947?

You really need to up your game if you think the world's most awarded and most popular Premier (PM Modi) and the most hard working political party (BJP) India has ever got, can be tarnished by someone snidely taking political potshots at Modi+BJP's most famous and incredible achievement yet: UPI.

It is poor manners to deride the visionary leaders of modern India as "authoritarian" when they ensured India remains world's biggest & most vibrant democracy and swiftly scaled the nation to a $5Trillion economy! That's why Modi has been democratically elected as PM for third time in a row!

Now back to the main topic at hand..

First and foremost, UPI is India's most popular real-time unified payments system and it is completely dominating the digital payments scene in India, because it is instantaneous, free for consumers (marginal fees applicable only for high value transactions, and where Interchange conversion is involved). UPI is so good and versatile, that its managing organisation NCPI is able to license the technology stack to other nations, who are then able to promptly launch their own branding of this versatile and powerful digital payments system.

Secondly, sheer scale of UPI is mind-boggling indeed.

In June 2025, UPI (Unified Payments Interface) recorded 18.39 billion transactions, with a transaction value of ₹24.03 lakh crore. The daily average for June 2025 was 613 million transactions and ₹80,131 crore. UPI has shown strong year-on-year growth of 32% in volume and 20% in value compared to June 2024.

Thanks to UPI, the payments situation has changed so drastically in India, that most banks are accounting for 85%+ payment transactions volumes through UPI itself!

Even the poorest people in India are using UPI ubiquitously and safely, it is that trustworthy, instantaneous and seamlessly easy to use.

No wonder Visa, MasterCard, and their ilk are terrified and desperate in India. Their vicious stranglehold has been broken, and how!

Goodness :D

You (all; I see couple of fledgling hners) just proved me correct in a way :/

> the world's most awarded and most popular Premier (PM Modi) and the most hard working political party (BJP) India has ever got

You forget to mention "Most UNESCO certified Best PM".

> It is poor manners to deride the visionary leaders of modern India as "authoritarian"

Hawww. You make me sad. I am sad now. Sorry?

But please answer me first - why are you addressing Him as just "Modi"? Wouldn't it be "Hon'ble Modi Ji" or at the least something like "Respected Modi Ji". You bad!

> Their vicious stranglehold has been broken, and how!

Hail!!!!! Hail!!!!

The fees are capped at 0.3% in EU and most countries have their own systems that are more popular.

The reason the credit card monopolies exist is they work globally.

But vast majority of people make most their transactions domestically. Why cater for the minority? Also, both can exist.

the vast majority of people doesn't care about payment technology/channels, they just want it to be convenient and work and not having to context shift between "if i pay on vacation i need to use this card, if i pay this guy i need to use this app, etc"

> These payment processors seem to be basically levying a 1-3% tax on a nations entire GDP

You're exaggerating for effect. GDP is the total value of all goods and services sold or bought; only a fraction of which is paid for with a credit card. I doubt an F35 is purchased with a Visa.

> These payment processors seem to be basically levying a 1-3% tax for the convenience of using their service, and we are willingly paying it.

Fixed.

India also has the RuPay system which is a direct competitor to Visa/Mastercard and it has long overtaken Visa as the top provider.

It’s also available in many global markets like SEA, GCC and others.

Fun fact: UAE's "Jaywan" cards (currently Debit Cards only) is UAE initiative to replace Visa, Mastercards, etc., and Jaywan itself is based on India's NCPI org's technology stack used for RuPay. So Jaywan is RuPay tech implemented in UAE! Other countries are following suit as NCPI has taken extraordinary efforts to make this technology stack versatile, scalable, interoperable, robust, resilient and easy to implement and customize.

So India is becoming the world leader in digital payments!

China is a footnote in the article, but their story here is interesting. China's WTO accession commitments in 2001 agreed to open its financial services sector, including payment card services, to foreign companies, except they never did.

The US sued (presumably on behalf of VISA and MasterCard) and won in 2012: https://ustr.gov/about-us/policy-offices/press-office/press-...

MasterCard just started being full offered in 2024. VISA still has not. In the meantime, China built their own dominate offerings, essentially avoiding the duopoly.

Not only have they avoided the duopoly: they've avoided dependence on US tech and US financial surveillance/control. The EU depends on Visa/Mastercard for cross-border transactions especially, and they've never been able to get their act together well enough to establish a home-grown, EU-wide payment rails system that would give them independence from US processors should they need that independence. That's a lesson that Russia learned back in 2014 and remedied with its Mir rails.

Too bad but good that Europe at least have SEPA for euro money transfer so not dependant on SWIFT and at least for mobile payment you have many systems in different European countries like e.g BLIK in Poland

SEPA/SWIFT are not anything like the Visa/Mastercard duopoly: the former are bank-facing, while the latter are retail cusotmer-facing at point-of-sale.

You do indeed have many systems in different countries in the EU. The problem is that they don't interoperate, and the rebooted EPI has had to scale back its goals. Its goal now is to offer a digital wallet and P2P transactions, with a card scheme only in the distant future.

The fucked up thing is how they are enforcing archaic puritan ideals on the whole world. Acting as self appointed global censors. (Eg. not allowing adult games on Steam or Itch.io)

The most confusing thing for me is why. I have read a few theories, but nothing convincing. What could be a strong enough motivator to do such a bizarre thing?

Also we need governments to keep them in line. We cant have private corps acting as de facto censors like that. Its completely undemocratic and unethical.

This is the wrong question to ask. The right question to ask is what is preventing other payment processors from seamlessly getting in front of the customer, at every retail location, and online? If other payment processors existed and were allowed to flourish, we would not give a damn if these two blocked 90% of transaction types. Instead, something is suffocating innovation and personal freedom.

> This is the wrong question to ask. The right question to ask is what is preventing other payment processors from seamlessly getting in front of the customer, at every retail location, and online?

Here in Australia, most places accept UnionPay as well as Visa/Mastercard - but I don’t know if any local banks offer UnionPay cards, [0] I think this facility is really targeted at visitors from mainland China. And if a cafe takes UnionPay, that’s just because the cafe’s bank accepts it, and why would the cafe refuse if the bank allows it? A lot of places refuse to take Amex even though their bank does due to its high fees, but I don’t believe UnionPay has that issue. A lot of places take JCB, although that’s not as widely accepted as UnionPay is-in Australia, JCB is handled by Amex, so a lot of merchants will refuse JCB (even if their bank accepts it) due to the same concern about fees. Diners Club used to be accepted in Australia too, until they pulled out of the Australian market last year (I think overseas Diners Club cards are still accepted by some places as Discover, but few in Australia have ever heard of Discover)

I used to have an Amex credit card issued by my bank, and I used to use it all the time-they’d kick back some of the extra merchant fee they got as extra frequent flyer points/miles - but Australian banks stopped issuing Amex when a regulatory change in 2017 significantly reduced how much money the issuing bank could make from them

I don’t believe the situation for online retailers is hugely different-if your bank supports UnionPay/Amex/JCB for in-person transactions, they likely do for online transactions too

[0] Bank of China’s Australian subsidiary apparently does issue UnionPay cards to Australian residents, but I doubt they’d get many customers except for immigrants from China-most Australians would never even consider applying, and they’ve made no attempt to market it to the average person

It's the very same payment processors stifling that "innovation," though. You can't invisible hand yourself out of this one.

Network effects and moats, sadly.

> Acting as self appointed global censors. (Eg. not allowing adult games on Steam or Itch.io)

It seems extra illogical when you think of how much money they make from subscription adult websites, even brothels-in countries that have legal brothels, I think you’ll find many of them accept credit cards, and Visa and Mastercard don’t appear to have a problem with that

Yeah, it's almost like porn isn't the problem, it's crime and chargebacks.

All of those sites use high risk payment processors if they go through the major card networks.

I sincerely doubt that people are issuing chargebacks for Steam store purchases.

Our son kept on buying games using Steam and then getting refunds for them in order to buy another one instead

I told him to stop, because I was worried that too many refunds might result in Valve taking action against the account

Still, why bother with a chargeback when the vendor has a generous refund policy?

I think you misread my comment. I wasn't saying they did.

>What could be a strong enough motivator to do such a bizarre thing?

Money. The only two motivators for a capitalist entity are making money and avoiding any government interference with making more money.

They certainly aren't doing it out of Christian principles.

> They certainly aren't doing it out of Christian principles.

Said Evangelicals unfortunately know how to raise a stink, and with stinks comes bad press or, even worse, haphazard attempts to regulate stuff. Or, under Trump, it might draw the ire of the Dear Leader himself and suddenly even a company like MC/Visa finds itself in hot water.

Either of these results is expensive, much more a cost risk than the profit of something like Itch is worth.

Something to do with https://www.pillsburylaw.com/en/news-and-insights/prosecutin... ?

> In particular, the TVPA imposes criminal liability upon corporations that benefit financially from human trafficking in “reckless disregard” that their business ventures engaged in such exploitation.

Not that digitally generated tits and asses have anything to do with human trafficking. But for a payment provider, porn sites are risky because their upload filters can miss content that violates these laws..

Russia's exclusion from Visa/Mastercard means cards there are on the Chinese networks and Russia's internal one.. it'd be interesting if adult content providers adopt these, bur I guess that means working with a Russian financial institute, which risks embargo from the US.

Imagine that, your porn stars ending up on the US embargo list...

Meanwhile, on the topic of human trafficking, Trump is panicking about being in Epstein's files...

Really? It's not difficult.

Visa doesn't give a single shit about porn, porn generates a lot of fraud and chargebacks that cost them money.

Most people I see complaining about how "unethical" it is are the ones who got kicked off the card networks for very good reasons like fraud or money laundering, or they got themselves on the MATCH list.

I've heard that Mastercard is running by evangelists

> The fucked up thing is how they are enforcing archaic puritan ideals on the whole world. Acting as self appointed global censors. (Eg. not allowing adult games on Steam or Itch.io)

Banks, which constitute the majority of both payment networks, are not "enforcing archaic puritan ideals on the whole world" nor acting as "censors."

> The most confusing thing for me is why. I have read a few theories, but nothing convincing. What could be a strong enough motivator to do such a bizarre thing?

There is no need for theories regarding the inability to sell "adult games on Steam or Itch.io" as the answer is simple. Banks have identified this particular line of business to exceed their risk tolerance for any combination of:

  Chargebacks
  Fraud
  Money Laundering

They have lost too much money in this particular domain.

That's it.

Not a total duopoly, almost all cards in Norway are dual network - the local network BankAxept + Visa/Mastercard, the cheapest option (BankAxept) is selected invisibly for the users when possible while the cards still works flawlessly all places that only accept Visa/Mastercard globally.

Big businesses only pay 0.0475% + ~0.003 USD per transaction for BankAxept: https://bankaxept.no/hjelp/priser-for-bankaxept

8/10 card transactions in Norway are BankAxept. I think many other countries have similar solutions, and if not they should implement them. It won't end the duopoly, but it does decrease the consequences.

Canada has something similar (Interac), but the transaction marketshare has been steadily eroding to credit cards. (Since credit cards offer credit + credit/cashback, and extra fees for paying by credit cards are very rare.)

Interac is a debit network in Canada, and the merchant fees are impressively low. They're generally under $0.10 as a flat fee, not a percentage (credit cards would cost the merchant around 2%). https://www.interac.ca/en/payments/business/understanding-fe... , https://en.wikipedia.org/wiki/Interac

One consequence of the flat fee is that at some retail stores, if you pay by debit, you can ask for "cash back". For example, if you buy $20 of groceries and ask for $100 cash back, the cashier will charge $120 to your debit card, you will have fully paid for your groceries, and the cashier will give you $100 in paper money as if he were an ATM.

Obviously, "cash back" is a terrible idea if the merchant allowed the customer to pay by credit card.

Cash back was/is a thing in Sweden for a long time, but I have not actually seen it used in ages, or mentioned. We simply don't use cash much these days.

> According to the Federal Reserve, over 100 billion debit card payments were made in 2021, compared to 51 billion credit card payments. In terms of transaction value, debit cards processed $4.6 trillion, while credit cards reached $4.9 trillion, indicating that credit transactions tend to be about double in average value.

Interesting that debit cards are twice the swipes that credit cards are. Didn't know that. I wore the debit card hair shirt for decades. They have a ~0.73% transaction cost vs 1.5% to 3.5% for credit card swipes. But I never once got any benefit from this lower transaction cost.

So now I have the Trifecta and a Savor. I work my credit cards aggressively and use their benefits to exceed their annual fees before even accounting for 3% cash back and Membership Reward Points and signup bonuses.

I am winning on this. Consequently someone else must be losing. It seems to me that the debit card users are subsidizing me.

Just a quick note, no one has ever become wealthy from their credit card rewards.

I don’t know what your system is, but it sounds like you enjoy it, so you do you.

And yes. Cash and debit cards have always subsidized credit.

The final straw was a trip to the UK. My debit card had foreign transaction fees and then I was waiting in the cattle call area for a BA flight seeing people significantly more relaxed coming out of airport lounges.

My system, so to speak, is really nothing. Sign up bonuses, (American Express wanted me bad), read the fine print and work the benefits, use the right card for the given transaction.

Does this make sense? No, it does not. Yet here we are. I've always detested this stuff yet merchants are forcing me to take this benefit. So I take it.

FWIW, 99% of my transactions are with my phone. So there is no flex involved. My iPhone makes the transaction virtually the same as with a debit card.

It's often about getting benefits out of transactions you're going to make regardless of how you pay for it.

If you're going to buy groceries, does it matter if you pay cash (debit) or use a credit card? The credit card gives you some percentage of that purchase back in rewards, which you then redeem on other things such as airfare, hotels, dinner out, uber, etc.

Think of it like a coupon that's valid everywhere, and every time you use it, a tiny sum is deposited into a savings account.

Pay it off at the end of the month and it's pretty much free money. Credit cards also have better cardholder protections, security and safety than using debit cards or cash.

Some people use credit cards for every purchase and become highly skilled at maximizing card rewards. This is also why many will say card fees don't matter - you often accrue enough rewards to pay for the fee itself plus lots more, making the fee irrelevant. The fee is there to compel you to use the card often enough to exceed the fee's value.

Speaking as someone who tried (and failed) to build a competitor, merchants don’t actually care about the fees. We built a mobile payment system using bank transfer rails (ACH debits and FedNow credits) for ecom platforms. QR payments, just like AliPay, but for the US. We studied past failures at this same idea, and targeted specifically high ticket items (jewelry, luxury), because the fees are a bigger problem, and we could solve other problems with pay-by-bank like limiting botting/scalping and providing digital proof of purchase for resellers.

We raised some money, built it, and demo’d it to dozens of different business. Instant clearing, way cheaper fees, bundle fraud insurance, digital proof of purchase. But it was an uphill battle- people didn’t want it.

Merchants might say they care about the fees, but in practice they care about conversion and getting sales. If you want them to act you need to promise to bring in new revenue, not reduce their cost of existing revenue.

Second problem is the rails. Your only option to debit is ACH, and ACH’s can be returned by the customer for any reason up to 60 days after the debit. Even with return-risk profiling, we had issues with Russian fraudsters using stolen SSNs to onboard as a merchant, do a “custom jewelry” sale for thousands, then as soon as the merchant gets paid out, ACH R10. The “merchant” has RTP’d that money away so when we try to debit it NSFs.

RfPs on FedNow (if they ever get widely adopted) would solve this, because at least they’re irreversible. Until then the only competitor is crypto, but good luck getting US consumers to use a different currency at checkout without tanking your conversion (people have tried!!)

> targeted specifically high ticket items (jewelry, luxury)

My immediate instinct upon reading this is "of course those businesses wouldn't be interested". They are selling a brand and image first, and if it looked like they wanted people to download some new app and put in their bank details to make a purchase instead of swiping a credit card it would cheapen the brand. Luxury stores are all about a streamlined experience and the appearance that money is no issue.

Yeah. High-margin, high-end businesses can afford the fees. If there's a space to compete it's low-margin businesses where 3% really stings, even if it's 3% of a smaller gross. I used to work with a company that served mainly immigrants and blue-collar workers, and something lower-fee than credit/debit was a constant conversation (we were partway through building an ACH backend by the time I left, but I don't know if that ever made it into production given concerns we had).

We tried with SMBs (it was our original focus, low net margin businesses). But 1. Deployment times are way worse in person, 2. Merchants still actually didn’t care (they said they did! But there was no strong need). 3. conversion at checkout is lower for small tickets than high tickets.

SMB business model just didn’t work, with tons of white glove customer support needed for a customer we’d make $20-$50/month in fees

With high ticket sellers the purchases are high intentionality enough that you can convert customers.

Not only only low margin but even more low price products. If you sell ice cream for $1 there is not only 3% fee but also minimal transaction fee like 30cent.

I recently made a purchase in an Ontario used book store that only took debit cards and cash (and the clerk was behind a COVID shield). Today I went to a used book store in Buffalo, NY that took credit cards (and the clerk was roaming around the store). Somehow that openness and lack of friction got me to buy more books for much more money. And I would gladly return...

I think when the guy mentioned he studied past failures it's prime example of crunching the numbers and applying theories without actual common sense. "Ah yes, I wouldn't buy a Gucci bag for $999 but for $995 it's a deal done" you don't need PhD in economics to realize this is stupid.

The fact that the second part of his comment is full of acronyms "we ASDFed the GHIJ over KLMN" suggest it's yet another case of a manager completely detached from reality of average consumer.

Haha i wish i were just a bean counting manager. A number of venture backed startups have tried exactly this idea, and it was a tarpit.

Confused about your hate of acronyms. The bank rails are a practical limitation on how effectively a startup can compete in this space. Do you feel the same hate when people use technical terms about coding eg “we deployed with Kubernetes on AWS”?

This is ecom, not in person, and we found these places are brand agnostic about payments— they don’t control the look/feel of PayPal, Klarna, etc. And for every Hermes, there are a dozen luxury merchants less anal about the brand.

White labeling the payments infra as “their pay” did intrigue them, but not enough

I suspect high-end merchants get that the financially well-off potential customers who hold high-fee rewards cards expect to be able to use them. Worth the 3% on a high-margin purchase to attract the customer vs. annoying them.

The fee ends up split between the cardholder, bank, Visa/MC, maybe the card brand sponsor… everyone’s happy.

I’m still convinced that someone could play our playbook and it would work. Just someone with deeper pockets and deeper industry connections.

Luxury is struggling in 2025 and is losing to the resale market which is growing 3x faster. They’re especially struggling with gen z. Build a branded luxury-only payments network that owns the category “buy to resell”. Attach purchase metadata to pay-by-bank identity for digital proof of purchase.

You have to play it right (digital proof of purchase generates social media posts and a verified stamp, ie buying it to flex). But that way you can convert young customers from rewards cards AmEx etc without having to compete on rewards

AliPay, WeChat Pay, and PayPay succeed because they don’t target this market at all — they target cashed based transactions and provide cash-equivalents. The whole reason why people use them in Asia is because people could use cash but it’s inconvenient to collect and store. These are far and above lower value transactions where fees are important but not as important as simply existing.

I think QR payments can exist in the US if they do the same things that happen in asia: you charge via cash and the balance is stored with the provider. There aren’t any ACH transactions to reverse. If you allow charging with ACH you only cover a small amount and you control risk accordingly.

Ya we looked in to the wallet fund model and while it solves fraud concerns, it introduces new frictions (funding the wallet) that makes growth tough.

Cashapp pay is leading in this department, and since they own the POS terminal Square they’ve actually been able to implement QR payments in some SMBs. They get terrible adoption, though

I think the other issue is that "crypto" is not "money". There is no card I can carry that I can take to an ATM and convert crypto to money knowing before I left my house that day exactly how much I would get down to the penny.

Crypto has value the way Gold or pawnable items do, and until that barrier has been crossed the people will never embrace crypto as an alternative to cash and credit.

Realistically the only way for that to happen would be if the US replaced their currency with a government backed crypto, but that is unlikely to happen without a coup.

Visa and MC could still offer lines of credit in such a system but they would not be the primary purveyors of capital motility and therefore their entire business model would collapse or require extensive restructuring.

Stablecoins do seem to address all these concerns. USD backed, and I believe Visa/Mastercard are adding stablecoin support so that there will soon be stablecoin debit cards.

Our thesis on crypto was that American consumers will never pivot to a foreign currency to do retail purchases. That’s just too much friction. It’s possible we get proven wrong, though

Not being the #1 priority is very different than not caring at all. It may feel that way when trying to sell the alternative, but the merchant would still disagree at the end of the day.

The alternative to new competition (which would probably also raise its rates as soon as it became popular enough) is regulation on the fees, as seen in Europe. This makes some sense as the problem is less with the capabilities of the systems which exist today and more with the size of the fees of established players. I don't see the US going down this route any time soon though.

Most likely, in my mind, is the world (and maybe eventually the US) moves away from US based solutions in this space over the coming decades as other governments continue to consider this something to act on.

The merchant would disagree, but the merchant is lying to themselves, haha. The tough lesson i had to learn was people’s stated preferences often don’t match their revealed preferences. I really wanted it to be true so i gave them a ton of benefit of the doubt, but still lukewarm response.

Regulation on interchange worked in Europe. The other option is government mandated support for bank transfer rails. That’s how UPI in India and Pix in Brazil took off- they were mandatory.

The US has FedNow, but it’s push only (not user facing, too high friction for checkout). RfPs are there but still low adoption.

Are you saying if MasterCard offered the merchant a 0.2% fee instead of the 2% fee, with all else equal, the merchant would actually prefer to keep the 2% fee?

To me the situation described sounds a lot like "I thought people cared about cheaper healthcare but when I offered them free clinic visits in Antartica nobody wanted to come. I guess they are just lying to themselves" - completely ignoring the reason for the rejection was the overlooked additional friction which actually raised total losses, not disinterest in lower cost itself. Offer a solution without the additional friction but with the improvement in the metric and I'm convinced you would find they are not lying to themselves about wanting to have more profit. Of course, the hard part here is creating such a solution would be extremely difficult (you'd have to onboard hundreds of millions of active users before you could pitch your solution to businesses, a bit of a paradox) - hence why MasterCard gets away with the rates and competition can not form (rather than confused merchants).

Do you think a FOSS version of this would be possible? Or is the infra too complex or require working with regulator bodies? I have been thinking how to empower individuals to collect payments without relying on Visa, Mastercard or Venmo necessarily and putting a pretty wrapper around ACH sounds nice.

I’ll talk to my cofounder about open sourcing.

In payments, though, the code isn’t the hard part. The hard part is the licensing/regulation and most of all the risk analysis. You need a partnership with someone with an MTL to move money; you need anti money laundering policies and sanctions screenings and to do KYB checks. These days that’s not that hard because there’s vendors for all that, but it’ll cost you low five figures and you need to go through an enterprise sales deals that take a month or two.

Even with all of that, you’ll probably still lose tens of thousands to Russian fraudsters who present as a perfectly legitimate American business.

Payments is a tough business

Yea and it’s everything else you listed that makes me think integrating with Venmo/Square Cash is the closest one could get.

> Merchants might say they care about the fees, but in practice they care about conversion and getting sales.

Also highlighted by all the merchants jumping to support the “buy now, pay later” providers.

I really wish of some decent way of getting money as a teenager without doing some insane kyc or having people buy crypto just to buy my stuff I guess. I know that anonymous money could be used for funding of bad stuff like terrorism and tax evasion but its just a mess that I can't get money but there are loopholes too :/

KYC should be made easier for teens and also I must admit, from what I see, remittances/cross country payments are just so much of an hassle but crypto sucks as a currency too in many aspects mainly on how to convert crypto <-> cash non kyc way

India did great by introducing UPI and subsequently RuPay to face these duopoly behemoths. UPI replaced queues to ATMs in general since one could typically scan a QR code and have the amount transferred in seconds. This is far more modern than ACH equivalents US has. But the downside is that it is a debit transaction; if you're scammed, there is usually no way to retrieve it unless a court orders so.

It feels broadly desirable to have a court decide what is and isn't a scam and perhaps hand out punishment instead of having a private entity act as the judge and executioner.

Absolutely. Except that it is much harder to raise a dispute with UPI than, say, with a Chase card that used Visa network. But, I much prefer the national offerings to a private company charging as much as 0.5% of transaction value for doing almost nothing.

> But the downside is that it is a debit transaction; if you're scammed, there is usually no way to retrieve it unless a court orders so.

in a practical sense, UPI is primarily positioned to facilitate digital transactions in a cash-first economy. while it would be nice to have safeguards against scams, especially as qr codes become more ubiquitous by the day. however, paying with cash did not have any inherent safety features either, so it is equivalent in terms of risk imho.

although i do have a personal anecdote of getting a payment reversed when a pos double charged me. i did have receipts and had to wait a few weeks, but in theory it is possible in regular scenarios (i.e. when it is between an individual and a business).

I work in Banking, and RBI (India's Banking Regulatory organization) has enforced stringent norms for UPI transactions behind the scenes, especially for chargebacks/disputes, to ensure that the UPI transactions are processed faster and easier by the Banks and intermediary processors, with the aim that customers get transparency and accountability in digital payments.

So stringent in fact, that RBI shut down PayTM Payments Bank which was most popular market leader in that sector, because PayTM flouted the mandated norms for digital payments and payments banking.

That is also beside the fact that UPI platform has high uptime and rarely faces any outages.

I have gone full on cash-only mode, people would freak out with the amount of fees they pay without knowing it.

I only have debit card, no credit card at all, in many places AUD$0.30-$0.50c is added to the goods price on debit cards. With cash, many places are offering 5-15% off when buying with cash only which is awesome.

If you are a gamer, you most have heard within the last 3-4 days now that Steam, Itch.io and others removed +18 games from their store because of a psycho Australian activists group called Collective Shout, who used words like rpe, child prngrphy forcing Visa, MasterCard, PayPal and a Japanese payment system to force those games stores to remove the games or they wouldn't have a processing payment.

Thanks to Visa/MasterCard monopoly, everybody was forced to do it. Many players don't even have +18 games filter enabled, for us in general this isn't about the +18 games but about US payment systems telling us what we can buy or not. Visa is getting its ass busted in Japan already with a Japanese politician joining the fight with gamers.

Dedollarisation has never been this strong, countries are already doing international trades using their own currency over the US dollar. I am not even getting into BRICS.

It is not a surprise that the US isn't happy with PIX in Brazil, it is a huge country, imagine all the money Visa/MasterCard are no longer making. Based on market data, it suggest an ESTIMATE around USD2.5-USD4B in 2024-2025 revenue lost lmao

The US is encountering the perfect storm!

The risk of deplatforming for many reasons should be deeply concerning all around. It's definitely concerning to say the least.

I spend many months in India every year and I've been paying with RuPay and UPI for the past 5 years exclusively. It works, and India saved 1-2% of all digital payments going to some leechy foreign middlemen who do nothing.

V/M would love to "but fraud" us sadly the actual payment fraud % is much lower than claimed and easily dealt with by the issuing/receiving banks.

Here in Canada, Interac has somewhat displaced that (even though most people still use Visa/Mastercard for transactions with businesses). That being said, it's especially useful for transfers between individuals as the transaction fees are relatively low, which makes services like PayPal or Cash App much less appealing domestically.

I’ve always wondered how that is even really possible, especially today … ignoring the likely bribery, aka lobbying. For example, in Germany there is something called an EC patent network (there are others in different European countries), they process what are effectively debit card payments like would be done on the visa network. I do not see a reason other than corruption and maybe lack of an initiative, for all of Europe to e.g., put all of Visa, MC, Amex, etc out of business by having a universally payment processing network standard for all payment types. It is effectively nothing different than the BPE and Mint making currency, why could the government not have a universal payment processing system for all transactions in America?

The article underplays the role stablecoins are going to play in the next 10 years. Compared to 6+ intermediaries in a standard SWIFT payment, a cross-border payment facilitated by USDC/USDT just needs 2 players - an on-ramp provider and an off-ramp provider. The result ⇒ insanely low costs, much lesser than 1-5% typically charged by a SWIFT payment.

This network is sustainable and running on established blockchains which have been running for over a decade now - ETH.

This network somehow needs to penetrate domestically too - something like a UPI. That moment is going to be a watershed moment that should break this duopoly.

PS: Its a separate matter altogether that Visa/Mastercard are trying to gel well into this new age infrastructure

> Compared to 6+ intermediaries in a standard SWIFT payment

Huh? I think the message format in ISO20022 can only 3 intermediaries before having to resort to more complex mechanisms. Most SWIFT payments have 0 or 1 intermediaries.

Not sure what OP is referring to either.

I guess you could consider SWIFT to be an intermediary instead of a delivery mechanism? But even that doesn't add up to 6+.

What I find interesting is how India’s financial inclusion push under the Jan Dhan Yojana (National Financial Inclusion Mission) led to unexpected consequences.

The government aimed to offer zero-cost bank accounts to extremely low-income citizens and needed zero cost debit cards to make them functional. Rumor has it they asked Visa and Mastercard to waive fees and both declined. Even Indian banks reportedly pushed back.

So India doubled down on RuPay, its domestic card network. What started as a fallback turned into a fintech revolution. Over 559 million bank accounts were opened under this mission, most powered by RuPay.

Ironically, if Visa or Mastercard had agreed, RuPay might never have taken off.

Mir works in around 10 countries not bad for a start

Yep, when financial instruments are being used as sanctions, countries seek alternatives.

The last section in the article speaks about RuPay but isn't this just one of the many implementations of UPI[1] ? In any case, imo, it is the start of the end for the duopoly and it is my hope that an truly open standard and protocol (unlike UPI) emerges (and no, the blockchain is not it -- crypto would just be accidental complexity in any potential solution).

[1] https://en.wikipedia.org/wiki/Unified_Payments_Interface

RuPay isn't an implementation of UPI - it's an alternate payment network like STAR etc in the US. As a matter of fact, it's only recently that RuPay and UPI were connected:

From 8 June 2022, RBI allowed the linking of RuPay credit cards with India's Unified Payments Interface (UPI). In the absence of a physical card, customers can use their credit limit through for transactions.

RuPay is debit/credit card as domestic alternative to Visa and MasterCard, while UPI is the digital payments platform. Both technology stacks are owned and managed by NCPI (National Payments Corporation of India is an Umbrella Organisation that facilitates services like UPI Payments, Bharat BillPay, RuPay Cards, FASTag, NACH, etc.).

in like 2011 I saw Daniel Radcliffe in How to succeed in business without really trying, and there's this line

> And other men may carry cards, as members of the Diners

that i did not understand until a few years ago someone mention the show, I remembered the line. And now at this moment, where this article reminded me of the Capital One acq. of Discover which happened to own Diner's, I can't help but think of this zombified credit card company limping along.

Sign me up for the Diner's platinum, which I have to assume will get 5x points at the five-and-dime.

This article feels machine generated

> How is it possible that, in the era of global competition, such a large market niche is completely dominated by only two players?

This is far from atypical! If you're interested in the prevalence and impact of market consolidation, Matt Stoller talks about it a lot in his BIG newsletter: https://www.thebignewsletter.com/

Where are all the "yes monopolies are good, thiel said so" people now?

We must enable competition in credit cards and payment systems with POSes.

Since this is adjacent to crypto, I came in here expecting some kind of hateful things being said about it, but seems like a fairly productive and honest discussion, something that is usually lost as soon as the c-word is mentioned.

Despite all of the issues that are within the crypto world, I do think stablecoins are a fantastic use-case that most of us should be able to get behind to break this duopoly. With some oversight/proofs of solvency for the issuers, I hope they can become the dominant payment method. I can say from experience, the fact that I can easily pay friends and also receive yield on my holdings is such a nice experience, especially considering the inflationary environment we're in currently.

And how much of Visa and Mastercard's dominance boils down to a combination of early network effects and entrenched relationships with banks, rather than pure technological innovation

Any country that depends on American financial system will pay a price. Which is why big nations are trying to protect themselves.

It's less about ideology and more about sovereignty

Now this is a "tech company" problem I wish the EU would tackle. Why do these American companies get to decide what I'm allowed to purchase?

I'm afraid the EU's stance on individual freedom is much worse though, if Visa/MasterCard were to originate from Europe.

This is an important topic. I wonder what it is that makes duopoly so prevalent in tech e.g. Apple vs Google for mobile, Apple vs Microsoft for desktop, Uber vs Lyft for ride sharing.

As for the linked article, it reads too much like AI slop for me to be bothered to analyze any of its specific points. If it's not AI, someone please correct me.

Toothless competition law enforcement doesn't help it.

Not just toothless, but also focusing on the wrong thing. Our antitrust laws haven't kept up with tech. They are still largely focused on consumer harm, which doesn't apply well when huge tech companies can offer stuff for free at a loss to snuff out any potential competition.

Instead we need antitrust legislation to look at unfairly favoring one's own service, attack bundling, and prohibit exclusionary practices/blocking access to protocols (Private APIs, basically Apple).

To use Apple as an example, we could legally mandate they provide APIs for third parties to access iMessage, AirDrop, SharePlay, etc. on their OSes so that third parties can offer accessories and services that compete on the same playing field as Apple's own accessories and services. Without mandating that openness, there can be no competitors. I can't make a smartwatch for iPhones and have it able to compete with the Apple Watch, Apple just simply gatekeeps and won't allow it - that should not be legal. Likewise for wireless headphones - no one else can make a set of wireless earbuds that can do device switching on Apple devices to the same level as AirPods, because Apple is gate keeping with proprietary tech.

The non anti-trust aspect of it with tech is mostly network effects. For mobile, the more users, the more apps, the more valuable that platform gets, starts to incur high switching costs, devs neglect or ignore any potential new entry into the market because it's not profitable to build for it, and that momentum is very difficult to overcome without regulatory action.

So what is the solution to this duopoly except for crypto?

I envision a third payment processor that isn't Visa or Mastercard and not even crypto.

It isn't Stripe or PayPal either, something completely different.

Thoughts?

Bring back Lina Khan and her monopoly crushing super powers. We need another Teddy Roosevelt type character to be our trust-busting savior or these companies will continue running roughshod over us until they've privatized the air we breath and are charging us a subscription fee for it.

Maybe something like India's UPI? https://en.wikipedia.org/wiki/Unified_Payments_Interface

The solution is decoupling and disaggregation. The core payment infra or transaction processing is a utility and there can be more regulation or state intervention there. Credit or lending is an add-on product which shouldn't be tied to payment infra.

Unfortunately answering question with: "yes, crypto". (Sorry?!) the Bitcoin Lightning Network could be a very good backend base. You can even try it today (Using Cash app's built-in Lightning support to buy a meal at Steak 'n Shake.)

why not crypto? stablecoins could be a credible answer to this problem

Not with the new acts passed this last week. Only established players are in that space now (Also - this is going to get way worse now with fees devaluing the dollar that are now invisible to the average consumer).

Which acts are you referring to? Care to elaborate?

Look at the GENIUS Act https://www.congress.gov/bill/119th-congress/senate-bill/394...

are you arguing against regulation? with the new act, there is a clear definition of stablecoins and disclosure requirements that are better for consumers than the current "trust me bro" stablecoins like USDT

I hope Wero will spread rapidly in the EU. It is SEPA underneath.

They fumbled the launch badly. Every bank has to integrate it manually and they won't launch integration for merchants until next year.

Hmm, Carte Bleue ?

Edit: oh, that's Visa Europe now...

Reading Barrett Brown's "My Glorious Defeats" at the moment, being reminded of that time Anonymous went after Visa, Mastercard, and others, in retaliation for them blocking payments to Wikileaks.

An action the payment companies took extrajudicially at the behest of the US government because the US gov was't happy with Wikileaks. Wikileaks' crime was that they'd been very successful at getting true information to the public about what governments were doing.

This was quite shocking to me (and at least some others, presumably) at the time, in 2011. I guess if we were taking it seriously, we would have been obliged to say: oh, how fundamentally authoritarian and anti-democratic.

When progressives/democrat/left types shout "fascism!" now on account of something Trump did or said, the cynical part of me says that a lot of them probably just want Obama/Clinton/Biden-flavoured authoritarianism rather than "ugly" lower-middle-class Trumpian authoritarianism.

Very many of us are quite critical of all authoritarianism, and don't feel like we've been represented by any presidential administration for our entire lives. Centrist liberalism isn't flashy or popular, though, and it doesn't spawn many angry rallying cries or outrage that goes viral, so you'd think that we don't exist.

The current flavor of authoritarianism is quite bad, though, and does distastefully wear its hypocrisy on its sleeves.

If "centrist liberal" means being critical of all authoritarianism, from Obama to Trump, where would the democrats lie in this political balance?

I ask sincerely here. That would be a centre which would be ten miles left of where the centre seems to be, from where I'm sitting. Curious to know how you view the political spectrum to arrive at this framework.

For example, Macron might be a good example. How would you classify his politics, based on the above framing?

Blocking payments to wikileaks is on a totally different level than deporting citizens to random countries because they said something mean about you.

I agree, the deporting of citizens is much worse in real terms.

They're both fundamentally anti-democratic, is what I meant. In both cases, the political / business class controlling the state is utilising private and public institutions to further their aims, with little to no care for law, morality, or even common decency.

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