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Comment by digitaltrees | Hacker News Reader

Trying to create a monopoly before the lack of antitrust enforcement window closes.

In the US, PayPal has nowhere near the adoption of other countries, for making payments directly between accounts, and Visa and Mastercard have enough regulatory capture to ensure it stays that way.

If there wasn't a regulation-ensured duopoly, everyone would be switching to RTP or FedNow which each charge 4.5¢ per transaction, without an additional commission.

What is the regulatory capture? Visa and master card have contract terms that ensure retail capture. That’s a private moat not regulation.

What’s stopping a new competitor to come in apart from regulations? You would expect someone already trying that given how profitable it is

The contracts with merchants prohibited them from accepting other forms of payment.

https://www.justice.gov/archives/opa/pr/justice-department-s...

Yea, I think you have this one backward? it's lack of regulation that allows Mastercard and Visa to say "if you do try to use some other payment process you can't use us". Since MC and Visa own all of it, no business can take that hit to their customer base

Some other countries don't have this issue for various reasons.

Is it a US thing? In many countries there are definitely different payment systems accepted by merchants, just not card based and/or directly linked to a bank account.

Yes, it's US (and maybe EU?) thing.

https://www.justice.gov/archives/opa/pr/justice-department-s...

With wechat in china, pix in south america and wero in europe, I think it's quite the opposite. All continents want to see visa and mastercard dead so they can bring back those transaction fees in house and it will work as the phone is the low friction payment method now.

Wero in the EU is fantastic, albeit still very young. Once it's mature and deployed everywhere, I see no reason to use something else in my country.

In fact, in France, the CB system endured despite visa and mastercard for 4 decades, so we know how to do it already.

A monopoly in a domestic market is sufficiently harmful to be avoided. It doesn’t have to be totally global.

>FedNow

There is no recourse if something goes wrong with FedNow, right? Like you get scammed, and the scammer just keeps the money. Seems like a pretty big difference (in theory anyway) to PayPal. Although I'm apparently not the right guy to ask, since I really don't see the use case for PayPal vs. credit card.

Regulation E applies to FedNow instant payments as it applies to payer recourse.

https://www.wolterskluwer.com/en/expert-insights/navigating-...

https://www.consumerfinance.gov/rules-policy/regulations/100...

Only for unauthorized payments, i.e. for transactions you did not consent to.

This does not cover products/services not received at an online merchant, for example, just like how you can’t retroactively cancel a check. Cards do allow chargebacks in this situation.

If there is a cartel it's at the Visa & Mastercard layer surely.

I can't wait for Europe to come up with an alternative for Visa & Mastercard.

European business pay a "hidden" tax to the US on everything, in the form of Visa & Mastercard commissions.

Which (a) the EU can and does regulate (b) the majority of the commission goes to the issuing bank.

I hate feeling as if I'm defending Visa or Mastercard, but if we're going to attack them, let's get our storytelling correct first.

That's fair but it does end up flowing through the US right?

I agree with this for in-person payments. But surely stripe has a monopoly on development api payments and PayPal on e-commerce. What i would expect is that visa Master card try to buy the stripe/PayPal.

I doubt Stripe is anywhere near the monopoly status.

Back when selling online tech courses was viable (pre-AI), about 30% of transactions in the US were from folks using PayPal on the platform I used. There's a huge of people who use PayPal, it's even more outside of the US.

It's the same argument why Google isn't never considered a monopoly to the online ads space. Because the whole ads industry is much larger.

Same thing with card payments. There are online card payments and in-store card payments and other kinds of payments. Stripe + Paypal volume is considered a fraction of it.

How else would you accept credit card payments on your website? Who are the competitors you would reach for?

No reason it can’t be broken apart in the future. States will likely file suit, as twelve already have regarding the Paramount Warner deal.

You mean that Paramount-Warner deal that people waited and let happen so they could break it up in the future?

The deal that a low regulatory executive administration is supporting, while states attempt to prevent it (acting in place of what one would expect from an appropriately functioning Dept of Justice and FTC) until regime change. Midterms are approaching, and this admin has a bit more than two years left. Some folks involved are either at, or beyond, human life expectancy as well. Sort of but not quite similar to Brexit, which barely eeked by, and now all of the old pensioners who supported it are dead after a decade and the country is ready to consider getting back into the EU.

TLDR This low regulatory period of the US political timeline will eventually end, and there will be a lookback/clawback period. Nothing is permanent. Rules can be changed at any time.

Except the general trend has not been equal degrees of snap back but rather a general trend towards market consolidation, deregulation, lowering taxes and eliminating anti trust enforcement. If we went back to the regulation immediately post world War this country would feel profoundly different.

Judge halts Paramount's $111B purchase of Warner Bros. in win for US states - https://news.ycombinator.com/item?id=48989518 - July 2026

https://storage.courtlistener.com/recap/gov.uscourts.cand.47...

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