Senate Bill Takes Aim at Visa and Mastercard's Rising Credit Card Fees For Merchants (marketwatch.com) 78
Two U.S. senators are preparing legislation that would give merchants power to process many Visa and Mastercard credit cards over different networks. From a report: The bill, which could be introduced as soon as this week, aims to create more competition among U.S. credit-card networks, a sector where Visa and Mastercard have long dominated. Sen. Dick Durbin, an Illinois Democrat, and Sen. Roger Marshall, a Kansas Republican, are expected to introduce the bill. Mr. Marshall said banks and major card networks lobbied his office to not sign onto the bill. He decided to move forward after hearing from a growing number of merchants, including small businesses, restaurants, gas stations and convenience stores, about the toll of the rising credit-card fees set by Visa and Mastercard that are often pocketed by large banks.
Hard to say this is a bad thing (Score:5, Insightful)
This is much like the app store problem - too much power in too few hands. And those fees are not going up because of increased costs. Percentage-based fees are relatively inflation-proof - they go up as the average transaction value goes up.
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Well, this is a new one. I'm used to being downmodded by anti-capitalists. But not by pro-credit card operatives.
Wtf.
Re:Hard to say this is a bad thing (Score:4, Informative)
This is much like the app store problem - too much power in too few hands. And those fees are not going up because of increased costs. Percentage-based fees are relatively inflation-proof - they go up as the average transaction value goes up.
Unlike app stores (to which the majority of your 30% is ate by credit card fees) the credit card companies are adding almost no extra value for taking up to 5% of the transaction value. Europe realised this years ago and capped it at 0.3% but that is just for the interchange fee. You've also got terminal fees(per month), gateway fees (per transaction), authorisation fees (transaction), service charges (monthly) and PCI compliance fees (varies but either monthly or yearly) and other fees that are conditional (I.E. refund fees and chargeback fees). It's still costing European businesses 1.5% to take money via cards. It's much worse in countries where they haven't capped the interchange fee.
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so I googled what the bill does since the article doesn't say.
Who cares...?
That's all you need to know.
I'm not actually that worried about that (Score:4, Interesting)
What I'm trying to do is highlight how the wealthy simultaneously lobby for things that benefit them like price controls while telling you and me that such things are completely evil and will only hurt the free market. It shows how hypocritical they are and that we should stop listening to them
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Got some examples?
This one is simple enough, if the cure is worse it's intentionally worse. Thank lobbyists if that happens.
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Got some examples?
This one is simple enough, if the cure is worse it's intentionally worse. Thank lobbyists if that happens.
https://en.wikipedia.org/wiki/... [wikipedia.org]
Re:Aren't price controls bad? (Score:5, Insightful)
Yeah. Look at the drug companies, they should be allowed to market anything just as long as the number of deaths is acceptable. And them airlines, regulating their safety is just a step too far. Food is another example, anything should be available for everyone, even if it winds up killing them.
Eventually the dead hand of the market will sort it all out...maybe a bit too late for the stiffs. But that's the price you pay for total freedom. Now about those guns, wouldn't it be great if everyone had a sidearm so we could finally settle our arguments once and for all?
Jesus, you are an idiot.
Re:Aren't price controls bad? (Score:5, Insightful)
Now about those guns, wouldn't it be great if everyone had a sidearm so we could finally settle our arguments once and for all?
Why stop at guns? What about hand grenades, rocket launchers, & drones? Even better, chemical weapons & biological agents. Let the markets decide!
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Fuck that! I want a neutron bomb with a remote control. "Turn down the music, you hedonistic partyers!" "You cut me off, apologize now!" "I want the last can of fucking soup, or else..."
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I want a neutron bomb with a remote control.
Remote control? Coward!
https://en.wikipedia.org/wiki/... [wikipedia.org]
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It's true! Laws banning usury limited the people who could loans to those who had a hope in hell of paying them. Now lenders make less money and use less ruthless debt collection methods, and so Vinnie the Knife is mopping floors at the mall. Won't somebody think of Vinnie the Knife?
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So you're missing my point (Score:4, Insightful)
That's my point really, there isn't a lot of legislation being proposed much less passed it's actually going to impact consumers like you and me in a positive way. The things that are impacting us and hurting us financially are very different than what impacts Walmart and Amazon. In the past when we actually had competition back in the seventies what was good for Wall Street might be good for main Street but we've completely decoupled those two things
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So we should pass no legislation, cause it might not work how we thought it would.
Got it. No legislation is what we have now. I know that is not helping the little people.
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so I googled what the bill does since the article doesn't say. It's price controls.
Can you go into more detail about what provisions of the bill constitute price controls?
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so I googled what the bill does since the article doesn't say. It's price controls.
Can you go into more detail about what provisions of the bill constitute price controls?
It looks like a fee control to me.
Price = price of an item.
Fee = (in this case) a percentage of the price paid by the merchant to use a credit card network.
(Also, merchants don't like cash. It's dirty, easy to steal and they have to make change.)
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I'm a merchant and I stopped accepting credit cards years ago. I had been a Discover merchant for almost 20 years. They fired *me* because I wasn't making them enough money. I laughed and didn't care. I accept cash now but don't like it because it's harder to keep track of than checks and Venmo. Yeah, it's a small business.
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That's probably going to cause problems because credit cards are a much higher risk product than debit cards for the banks. Folks kind of forget that every 10 years our entire economy collapses and those banks have to writ
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Would you acknowledge a difference in kind between a law that regulates prices, and a law that regulates banking fees?
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That's probably going to cause problems because credit cards are a much higher risk product than debit cards for the banks.
It seems like the "higher risk" you're referring to is the risk of default on credit card payments. That's the whole point of charging interest, and is the reason why the interest charged on unsecured credit card debt is going to be a whole lot higher than interest on a home equity loan. Doesn't seem reasonable that everyone should pay a flat fee to account for the fact that banks offer credit to high risk borrowers.
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The Bill has not been proposed yet, so there is no text! Something about preventing CC companies from requiring specific network be used and Banning Visa/Mastercard from imposing Technical security requirements.
The latest legislative proposal in the offing would ban credit card companies from pressuring merchants to use a particular network to satisfy security technology requirements or imposing penalties if they don’t meet quotas for a particular network.
I rather look at other bills they have pro
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The latest legislative proposal in the offing would ban credit card companies from pressuring merchants to use a particular network to satisfy security technology requirements or imposing penalties if they don’t meet quotas for a particular network.
That doesn't sound much like "price controls" to me...
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so I googled what the bill does since the article doesn't say. It's price controls. Now, I'm not entirely opposed to price controls, but funny seeing a Republican signing on (and I have my doubts about Durbin). Pretty sure if we applied this same logic to rent neither of them would be on board. [...].
There is a huge difference between regulating the price on an duopoly that has basically made itself part of almost every transaction and where rejecting to deal with them has severe, negative consequences - and regulating a market with a large amount of suppliers. The main issue with rentals is that the demand outstrips the supply, and thus prices go up. That sucks, but since everyone wants to live in the same location increased pricing is logical. If prices were too high, people wouldn't accept those pr
So every single apartment in 50 miles of me (Score:3)
Your problem is that there's a duopoly but the solution is in price controls it's enforcing antitrust laws. What makes that hard is that you've allowed antitrust laws to go without enforcement for over 40 years. Undoing that damage is
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What makes you think oligopolies eventually won't form in cryptocurrency providers? The network effect of integrated features and services will do the same they always do.
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Any product or service can and often do consolidate into oligopolies and monopolies.
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It's highly speculative if the decentralized approach even works in the longer run. Too early to tell.
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Hahaha... Slashdot has been predicting the collapse of Bitcoin for at least the past 10 years and yet it's never been stronger.
Huh? It was definitely an awful lot stronger about 6 months ago.
8 moths ago? Even stronger than that.
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Price != strength
It's almost as if you think there's behind Bitcoin apart from "belief".
bitcoin fees are higher and it can be slower (Score:2)
bitcoin fees are higher and it can be slower
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All the things that make bitcoin easy (online wallets, exchanges, etc) tend to be private entity controlled and heavily compromise whatever security features are inherent to the idea so bitcoin can be easy, open or secure, it can't be all three at once.
That's not to say some sort of decentralized electronic currency couldn't be all those things but Bitcoin itself is not it, it would have to be something new and built to purpose. There is too much real money in Bitcoin now to fix it because fixing it would
Collusion (Score:4, Insightful)
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They don't have to work together for price fixing to happen. They can legally copy each other - just look at gas stations lately (or ever). However, it is anticompetitive and they can still be hit with antitrust actions without being a sole monopoly.
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They can legally copy each other - just look at gas stations lately (or ever). However, it is anticompetitive and they can still be hit with antitrust actions without being a sole monopoly.
They're not competing with each other on price, that's a no-no.
Re:Collusion (Score:5, Informative)
They can legally copy each other - just look at gas stations lately (or ever).
Gas prices are based on the projected price of the next tanker load for each station. Stations tend to get their gas from the same local distributors.
Gas stations make almost nothing on gas, they make money selling overpriced chips and sodas.
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Is this actually true though? If that were the case, why would gas stations install pumps that have pay-at-the-pump and television screens to keep you outside?
You'd think that they would want to ensure that you go inside to pay so that you impulse buy other items.
I actually can't even remember the last time I went in a gas station. I always pay at the pump.
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Almost nothing is probably true most of the time. Probably 10 cents on the gallon and at thousand gallons a day. But when prices go up, you get to charge more on gas you already bought cheaply. When prices go down, stations are all slow in reducing - the each hold out as long as possible, but as soon as someone drops their price, it cascades quickly to the rest of the station sin the area. So they profit more off of the up and down swings than on the daily average.
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Is this actually true though? If that were the case, why would gas stations install pumps that have pay-at-the-pump and television screens to keep you outside?
When I first noticed those, they had a mute button. Lately, they seem to have increased the volume and removed the mute buttons.
Maybe their intention is to use the obnoxious racket to force you to seek refuge inside the building.
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They must get paid for showing ads as the main reason for it. Because if you haven't noticed, it doesn't stop when you finish pumping. You have to wait a solid 10-15 seconds after that for the receipt to print, because it doesn't print until it's done playing video.
The problem of credit cards for small businesses (Score:1)
My primary credit card is a rewards card - a relatively fancy one. Not top end, but significant enough that I know my card is "expensive" for companies to accept. I use it for... everything. And I mean every last thing that can possibly go on that card. And I use those rewards. Sometimes I exchange the points for gift cards, sometimes for merchandise. This summer it was a natural gas BBQ. I don't carry a balance, and I haven't paid interest in 5 years.
The only exception I make is for small stands at farmer
Re:The problem of credit cards for small businesse (Score:4, Informative)
It should be illegal, I tell ya!
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Re:The problem of credit cards for small businesse (Score:5, Informative)
Some places used to do this. IIRC VISA/MC hated it (of course, they don't want consumers to realize there's a cost involved), so they had it in their agreements that merchants had to charge the same for cash as credit card.
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Most grocery stores and resteraunts due not accept checks. Really, very few places do.
I'm like the grandposter and charge everything and get the rewards without ever carrying a balance. This has become harder with adding my wife on the card as she is more "pay the minium payment" type. I end up paying the difference because it's cheaper than interest (since i have noi idea when she will get around to paying it) and I am too balless to call her out on it or cancel her access.
I do see gas stations offer a
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The result is, everyone just gets charged more to make up the cost of the people using cards. The custom
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I have a couple of credit cards with different cash-back schemes; last year they netted me almost $900. They're all no-fee cards, and I never pay interest (in 25 years I think I've paid interest maybe 2 times, when the bill got under the wrong pile of mail).
If you have okay-to-good credit and can pay cards off every month, shopping for good rewards is just good sense.
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Apparently, the file servers the apps are hosting on have some extra bits I am pretty sure the admins added to take home.
Why interfere with the free market? (Score:3)
Just how many merchants chose not to accept AMEX anymore because their fees were too high, so too should merchants make the choice on MC and Visa. The government shouldn't need to manipulate the free market.
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Don't know about you, but I would be in a world of hurt if Visa suddenly went under.
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Will they go under? I doubt it.
They will change their fees or be rejected by more merchants.
Even if they did go under, you will probably get a nice offer for a no-interest roll-over from whoever steps up to take their place.
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Re:Why interfere with the free market? (Score:5, Insightful)
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"The public" in this case are the merchants. The same way that they did with AMEX, if they hafta raise their prices too much to include the fees, whey will drop the offending company.
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Amex was relatively easy for merchants to discard on account of high fees because alternative ubiquitous competitors existed (visa and mc) with lower rates.
There are no remaining ubiquitous competitors, so if merchants decide to quit them because their fees are too high, they will be forced to go cash-only.
Which would probably cost the company more money in terms of lost business than they are losing on the fees that the credit card companies charge, so any whining or complaining they might make about
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The government shouldn't need to manipulate the free market.
Also we should be able to ride unicorns to work. And we shouldn't have to work anyway.
I can say lots of things should or shouldn't be the case too.
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When a market is anti-competitive (e.g. monopoly, duopoly, oligopoly), it's not really "free". That's why intervention is needed.
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Just how many merchants chose not to accept AMEX anymore because their fees were too high, so too should merchants make the choice on MC and Visa. The government shouldn't need to manipulate the free market.
The problem is, it's not a free market for two reasons.
1. For decades now VISA and MC have been getting laws passed to favour them, such as making credit card surcharges illegal. If we truly had a free market there would be nothing wrong with a merchant passing on the cost to the end consumer in the form of a surcharge.
2. Visa, MC and the banks have been cajoling people into using cards and distrusting other forms of payment. The end of cash is their holy grail, the last refuge of transaction that doe