Indeed, and also that whoever wrote the article, didn't actually investigate the reason why they decided to raise the prices at the same time (besides "the fees help cover costs related to fraud prevention and innovation" but not saying why both of them need it at the same time), and questioning if there is collusion going on as that would actually be malicious use of their market position as a duopoly, and would make for a much more interesting article.
I always forget Mastercard and Visa are two separate companies, as when people talk about them, they are always said together like it's a hyphenated name Mastercard-Visa. Mastercard and Visa are always accepted either one is accepted. Discover and AmEx are totally different, and stores can accept one without the other.
It's clear that Mastercard-Visa is by design meant to be the other's alibi for not being declared a Monopoly.
What fraud prevention and innovation? They don't investigate anything. My card has been stolen or skimmed 3 times in 2 years. They just write it off and send me a new one. How many billions a year are these two companies foisting on us instead of actually fixing the fraud or prosecuting it?
That looks like a US version of Faster Payments* (UK) or SWIFT (Eurozone) that enables instant wire transfers between bank accounts. I doubt very much it is suitable as an alternative to credit/debit cards for retail payments. For one thing, there's zero fraud protection, it's the electronic equivalent to paying for something with a cashier's check. For another, it's a pretty laborious process - you have to sign in to your online banking, enter the recipient's bank account details and the correct transaction reference, probably do some kind of 2FA.
For a third thing, while in the UK banks generally don't charge anything for transfers, the Bank of England charges a few pennies (£0.07 last I heard) per transaction. If people were routinely making several of those payments every day the way they do with cards, I'm sure banks would start charging fees.
* By the way, Faster Payments went live in the UK in 2008, but it still took a couple of years for all consumer banks to adopt it.
It's pure laziness. One should have raised prices first and then a week or month later, the other should have followed. At least pretend you are competing with each other. Look at coke and pepsi. One has a sale this week. And then next week the other has a sale. They alternate.
In a society that doesn't allow monopolies, I guess we are destined to get cooperating duopolies.
V and MC need to be careful here. My natural gas utility has decided to turn off auto pay using credit cards completely.
V and MC should be happy to collect their 3-5% and leave it alone, but keep on kicking the bear and acceptance and usage is going to go down.
They are going to kill the golden goose. If they were smart (and they aren't), they'd work to lower fees and make sure that utility providers can continue to accept cards at a lower fee structure. We are at peak credit card usage and with any increase that's only going to drop.
Agreed. More and more companies are allowing ACH and passing (some of) the savings to the customer. I worked in this industry and it is really hard to get users to be comfortable with linking a bank account, but the incentive for the company is pretty huge. Any company that can bribe the user to make the switch should. Especially for recurring payments.
Problem with ACH is you have to cancel your bank account to stop withdrawals. There are horror stories of people getting fired and being unable to stop ACH withdrawals (I'd rather my rent bounce this month than not be able to eat, etc) and ending up hosed. With a card you can just cancel the card number. It's best to use your bank's bill pay (push) instead of any external automated billing (pull).
Luckily, you can still manually pay each month using a credit card. With two data breaches already in 2023, I'm not trusting T-Mobile with my bank account information.
Especially as the barriers to entry for competitors are much lower with QR code/mobile payments taking off in many countries (UPI, tikkie, swish, mobilpay, paypay etc etc)
A lot of stores are starting to make clients pay them (and do not communicate most of the time, so check your receipts). This plus the forced tips and fees in restaurants. It is probably time to force any seller to show the real price not the tax and fee free one.
I'm fine if there is a cash discount (some places do that and that's much more respectful of the cliets as they usually advertise for it).
I’m sorry, why should sellers be fined for cash discounts? Owning a credit card is not a legal right, it’s a privately owned transaction processing network. If my daughter sells lemonade on the street corner and asks that you tip her with the credit card fees that she got charged to take your mode of payment she is at fault?
From the context, I suspect they meant “And then it is fine if they offer a cash discount” (but you have to give the full price for non-cash customers as the default).
> If my daughter sells lemonade on the street corner and asks that you tip her with the credit card fees that she got charged to take your mode of payment she is at fault?
Depends on the location. In the EU, it would be illegal to charge someone more for using a credit or debit card:
> You're not allowed to charge your customers extra for using a credit or debit card. This applies to all card purchases (in shops and online) made throughout the EU.
It may not be a legal right, but we're dangerously close to it being a practical necessity. Many places have gone completely cashless, including some public run entities like parking meters, etc..
I'll just leave this here in case anyone finds it useful. This system only works if you participate in it. When you think surely the government will do something about this, be the person to get that ball rolling, it doesn't happen by magic.
I have hopes with FedNow but need to be a bank to avail its facilities. which is not super hard but will need a bunch of capital. at least it can corner all the micro payment & debit purchase market with low overhead. Kinda like India's RuPay mechanism. that will end up butchering the CC companies cash cows though. When enough data flows through the system someone can creates a pseudo-credit score by looking at income-expense flow and use it to extend credit cutting out these ancient leeches.
I think the killer is that you would be forced to interface with consumer's banks, who wouldn't be particularly interested in helping your effort to undermine credit cards.
Or you could extend credit, but then you need to charge fees to cover interest of loaning out that money. Never mind the massive capital reserves to cover it. And now you're really just another credit card company.
This article is pretty light on details. What exactly are the new fees? In what situations do they apply? Is there some specific reason why Visa & Mastercard are doing this at almost the same time (beyond regular greed)?
“We are publicly traded companies and are failing to meet growth demands, and so are raising prices, because as we all know, not infinitely growing means you’re a failure of a company”
Knowing about the corporate history of these mega-corporations is helpful to understand their ubiquity today. Mastercard came out of Bank of America's innovative "Master Charge" business. Visa was formed from a consortium of many banks. Kinda parallel to how Venmo is owned by one financial firm while Zelle is owned by a consortium (perhaps one day each spins out to become the next gen MA nad V). To this day, Visa stock has a 96% institutional ownership, far higher than the avg megacap. Mastercard has over 75% inst ownership. The structural importance of these companies today goes back to their respective origins in the banks themselves.
>The changes could result in merchants paying an additional $502 million annually in fees
Considering the global reach of the two processing networks...that seems small enough to be a rounding error. Hardly surprising considering the costs of everything seem to be on the rise.
Readit News
It's clear that Mastercard-Visa is by design meant to be the other's alibi for not being declared a Monopoly.
For a third thing, while in the UK banks generally don't charge anything for transfers, the Bank of England charges a few pennies (£0.07 last I heard) per transaction. If people were routinely making several of those payments every day the way they do with cards, I'm sure banks would start charging fees.
* By the way, Faster Payments went live in the UK in 2008, but it still took a couple of years for all consumer banks to adopt it.
In a society that doesn't allow monopolies, I guess we are destined to get cooperating duopolies.
https://reportfraud.ftc.gov/
V and MC should be happy to collect their 3-5% and leave it alone, but keep on kicking the bear and acceptance and usage is going to go down.
They are going to kill the golden goose. If they were smart (and they aren't), they'd work to lower fees and make sure that utility providers can continue to accept cards at a lower fee structure. We are at peak credit card usage and with any increase that's only going to drop.
edit: clarify my last sentence
Depends on the location. In the EU, it would be illegal to charge someone more for using a credit or debit card:
> You're not allowed to charge your customers extra for using a credit or debit card. This applies to all card purchases (in shops and online) made throughout the EU.
https://europa.eu/youreurope/business/finance-funding/making...
Guessing there are no such laws in the US? Or maybe nowhere else? Not sure.
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https://reportfraud.ftc.gov/
I wonder if the newly opened FedNow service could work as a viable back end for enormous amounts of micropayments
Or you could extend credit, but then you need to charge fees to cover interest of loaning out that money. Never mind the massive capital reserves to cover it. And now you're really just another credit card company.
That is what a smart business would do, respond to foreseeable pressure.
https://www.moneris.com/en/support/additional-resources/paym...
Premium card fees up from 1.8% to 1.85% and super-premium up from 1.97% to 1.98%.
Bloomberg claims that Mastercard is introducing a pre-authorization fee:
https://archive.ph/sFo82
However, you can see in the Moneris page that Mastercard actually introduced that pre-auth fee back in Nov 2019, and it is 0.05% or $0.01.
So, seems to be pretty much a clickbait nothing-burger.
“We are publicly traded companies and are failing to meet growth demands, and so are raising prices, because as we all know, not infinitely growing means you’re a failure of a company”
Considering the global reach of the two processing networks...that seems small enough to be a rounding error. Hardly surprising considering the costs of everything seem to be on the rise.
I have been running into a lot of fee recovery by small businesses here in Ohio. The state parks definitely recover all fees from card payments.
Debit or credit card.