Credit card companies teamed up with visa/mc to collect 2% transacrion rents from from retailers. No other country has this kind of setup and card transaction costs elsewhere are only like .10$. This market structure is further inhibiting fintech innovations that are already widespread in China, such as Ant, QR payments and facial payments
The only way I see to end this duopoly is if consumers are forced to pay transaction costs rather than retailers to incentivise using GPay or ApplePay linked to bank accounts or legal limits on transaction costs
Want to see the real deal?
More inside scoop? View in App
More inside scoop? View in App
blind
SUPPORT
FOLLOW US
DOWNLOAD THE APP:
FOLLOWING
Industries
Job Groups
- Software Engineering
- Product Management
- Information Technology
- Data Science & Analytics
- Management Consulting
- Hardware Engineering
- Design
- Sales
- Security
- Investment Banking & Sell Side
- Marketing
- Private Equity & Buy Side
- Corporate Finance
- Supply Chain
- Business Development
- Human Resources
- Operations
- Legal
- Admin
- Customer Service
- Communications
Return to Office
Work From Home
COVID-19
Layoffs
Investments & Money
Work Visa
Housing
Referrals
Job Openings
Startups
Office Life
Mental Health
HR Issues
Blockchain & Crypto
Fitness & Nutrition
Travel
Health Care & Insurance
Tax
Hobbies & Entertainment
Working Parents
Food & Dining
IPO
Side Jobs
Show more
SUPPORT
FOLLOW US
DOWNLOAD THE APP:
comments
Cash ain’t free either. It has carrying costs and those armored safes aren’t free either.
It’s a good deal for everyone. Not much to squeeze.
Everything you have stated is classic monopolistic behavior. They give consumers rewards to lock them in, while charging retailers a percentage instead of just a flat fee for transaction.
Cash isn't the only other option, digital payment solutions can take over like WeChat in China, which is fee free for transactions!
Its not a good deal at for retailers and small businesses who basically have a 2% tax...
Asian and by extension Latin American payments ecosystems evolved differently because they are newer and relative to the American ones don’t offer enough added value to change consumer behavior.
The EU regulated the profits away so you have little innovation. And the bloc was largely incompatible due to many systems merging and the lack of a 250 year old central bank as in the US.
Furthermore the networks V/MC don’t offer the rewards. The issuers do. And they change networks all the time. Your logic makes no sense.
Generally it’s a 3 or 4 party model.
1. Issuer bank- they keep the lion share but return most of it as cash back.
2. Network - visa/mc- their usual share varies from 0 to upto 0.4. For example- Costco pays 0 to visa on their citi bank cards.
3. Payment processor- they keep a small share for providing the end user platforms.
4. 3rd party company(optional)- Apple and google for Apple Pay and Gpay are examples of this. All airline and hotel chain credit cards etc have some share.
Most of the charges are usually for the services that each of the parties provide. Of course they have their profits build it but that’s how businesses work.
Facebook launched payment by WhatsApp in India last month. Soon, they should be launching in other countries too. It is the same concept as WeChat pay. Take a guess what network rails they run on?