Relevant: due to <i>Ohio v. American Express</i>, merchants are generally unable to steer customers from using a particular card. For example if a merchant accepts Visa at all, the merchant has to accept all Visa cards, not selectively choose the lower-fee cards; the merchant also cannot tell the customer to use Discover instead to save costs and only use Visa if that's the customer's only card. This anti-steering provision is originally invented by AmEx and now all four major networks have this requirement. And the SCOTUS just ruled that anti-steering provisions do not violate anti-trust regulations. So the only possible recourse is to outright stop accepting a particular payment network.<p><a href="https://www.supremecourt.gov/opinions/17pdf/16-1454diff_6579.pdf#page2" rel="nofollow">https://www.supremecourt.gov/opinions/17pdf/16-1454diff_6579...</a>
<a href="https://www.bostonfed.org/publications/public-policy-discussion-paper/2010/who-gains-and-who-loses-from-credit-card-payments-theory-and-calibrations.aspx" rel="nofollow">https://www.bostonfed.org/publications/public-policy-discuss...</a><p>" On average, each cash-using household pays $149 to card-using households and each card-using household receives $1,133 from cash users every year. Because credit card spending and rewards are positively correlated with household income, the payment instrument transfer also induces a regressive transfer from low-income to high-income households in general."
In Denmark we have a national payment system called Dankort. All issued Visa cards also work as Dankort. Transaction fees on Dankort is one tenth of visa, and all payment terminals default to Dankort. This saves Danish retail a lot of money while still ensuring they we can buy stuff online and when traveling using visa.
This seems like a missed opportunity for Google Pay and Apple Pay. Before smartphones and NFC, it would've been too much for every merchant to make their own card, nobody is going to carry that many cards.<p>But imagine if Target, Walmart, Best Buy, etc. made store cards and they all integrated with Google/Apple Pay. When a customer enters the store, the app could automatically pick the right card. Google and Apple just needs to be cheaper than the rates charged by Visa/MC/Discover/Amex.<p>For example, I have a Target Redcard. Why isn't this card integrated with Google/Apply Pay? They've already setup the financial infrastructure to extend credit to customers. It should be a small step to add this to Apple/Google Pay.
In Australia, despite the credit card companies and banks fighting tooth and nail against it, it's legal for merchants to charge credit card fees <i>and</i> the fees have to be proportionate to the actual merchant cost.<p><a href="https://www.accc.gov.au/consumers/prices-surcharges-receipts/credit-debit-prepaid-card-surcharges" rel="nofollow">https://www.accc.gov.au/consumers/prices-surcharges-receipts...</a><p>Unsurprisingly, nobody uses AmEx or Diners here, because nobody's keen on paying 2% surcharges.
I hate credit card fees as much as the next guy, but to be fair my credit card was the only way I could pay for things in Asia since I just lived there for 6 months. If I had used cash, the only ATM near me stole my friends debit card, and multiple people I know were robbed and pick-pocketed. My credit card insulated me from those risks, which I was fine paying an extra 1% for.<p>Now that I’m back in America the risk is far less, but what alternatives in America are there? I hope the payment apps/wallets become universal but we definitely aren’t there yet.
A lot of problems would go away if all merchants (voluntarily or by law) explicitly charged their payment costs to the customer. Both for card and cash transactions, because cash handling isn't free either.<p>The customers using high reward cards would then soon discover that they are just paying for those rewards themselves, and the free market would quickly push everyone to the most efficient payment systems.
I'm not sure I understand why this is a big deal all of the sudden. Don't retailers already account for these costs when they're choosing prices?
Good? I hate the asinine secondary market of "points". Just don't take the money in the first place and then we don't have to sort out how I can reclaim it somehow.
At this point they should consider investing in their own debit-like card issued by themselves. You prepay it with $100, you get extra 5% loaded on the card, and additional discounts for using it. The retailer saves on per transaction fees since they will have to only pay it once for $100.
The penetration of credit cards into everyone's daily life is already too deep. Let's face it, at this point they already got everybody well locked up. Any attempts to resist from just a few companies here and there are really just futile.
Maybe this is crazy, but it seems like Google or Amazon could compete with a credit card network with lower merchant fees. Besides being great, it would be great PR.
In the early days of the Republic, individual Banks used to print their own currency. It was all dollars, but it was produced by different companies.<p>Now our different dollars are plastic or even just ephemeral, the difference being that they may not be universally usable. Something's definitely wrong here.
The article mentions technological alternatives - what are they? There is no way blockchain can fill this void, so .... what can do electronic payment if not the giant card networks?<p>interesting problem
Kroger bought out a local chain here in Michigan (Hiller’s) that was way better than Kroger and then laid off the Hiller’s employees and killed the chain. I’m never gonna feel any sympathy for Kroger.
> over the $90 billion they pay in swipe fees every year.<p>> Kroger's revenue was 122.7 billion USD in 2017<p>That makes little sense and makes me wonder why Kroger does not issue its own credit card. Credit cards are a rent-seeking racket that eat lots of profit. Everyone knows it but no one knows what to do about it.
These kinds of problems (swipe fees, etc) is where I believe cryptocurrencies shine.<p>Having a fee payment which is reasonable and fast confirmation times would solve this problem immediately removing the need for third parties.