Ask HN: Why do we need Visa/Mastercard in today's world? | Hacker News Reader

Ask HN: Why do we need Visa/Mastercard in today's world?

9 pointsyalogin10 comments

Visa/Mastercard are just networks that facilitate communication between the acquirer and issuer. More like the manager in the movie Office Space. So why do we still them, I mean Visa/Mastercard? Its 2014 and every server is connected to everything else and what can Visa still provide? Do they actually provide value or is it a giant marketing success now?

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If fraud wasn't a thing we wouldn't. But since it is a massive PITA, having a middle-man who can help detect and combat it is useful.

Fraud costs everyone (merchants and customers alike), so every time a fraudulent transaction is blocked everyone except the fraudsters "wins."

The banks build and maintain the infrastructure to fight fraud and not Visa/MC. Its a massive PITA for the banks and so I get a call from the bank when there is a suspicious transaction not Visa.

Banks may have their own infrastructure but they can receive fraud alerts from upstream, and transactions can be blocked before they even hit the bank.

This is sort of like walking into a building with several billion computers wired together with ethernet cables, token rings, and fiber, and asking "Why do we need all this cabling anymore? Let's just skip the middleman and replace it all with wireless."

VISA and MC make it their business to make sure they are an absolute essential part of the transaction, if not in principle, in practice.

Exactly. I cannot be the first person to ask that question. Hence trying to understand what the reasons behind it are. What exactly makes Visa and MC so essential. What do they offer that someone with big pockets (or a consortium) cannot upend?

Visa and MC (as well as AMEX, JCB and Discover) provide the issuing of cards and recording of all the cards for use. I would consider them a form of governing body similar to ICANN of internet (maybe bad example as not everyone likes ICANN)

Not everyone likes Visa or MC either and I'd be willing to bet they're are much better known and thus much more hated.

I almost pay everything by credit card (visa). If it disappear, I imagine you'll replace it with something else, what would be the differences between the new thing and VISA? In 10 years?

MC and Visa were originally setup by the banks. The only people powerful enough to create another system like this is the banks.

Bankers and programmers.

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