The problem isn't that there aren't strong anti-fraud tools available, it's that businesses by and large don't use them. Merchants struggle as a whole to get to even 50% of card-accepting businesses actually being PCI compliant (the security regulations for accepting cards) and the ones that become compliant often fall out of compliance again within a year.
>Being able to use a RFID/NFC reader in close proximity to someones wallet (like in their back pocket, standing ahead of you in line) and being able to charge their card without even touching it is not a very good thing lol.
It's not, but it's also extremely uncommon. The cards people have aren't typically RFID, and NFC has a much narrower range.
The problem is that as far as pricing is concerned, regulating at the interchange level isn't going to have the effect people want. That's what happened with the Durbin Amendment.. it capped regulated debit at 0.05% and 22 cents at the interchange level... but processors can still add whatever fees they want on top of that.
Actually Visa's Credit Assessment rate is .14%. They raised their prices by 1bpt in January 2019 and wrote themselves a $500 Million check by doing so. This is one of the reasons why Visa's stock performs so well over time.
I can't remember the exact figure, but I believe there is roughly only a two basis point spread between what the network providers take versus the operating costs to run the network. Therefore, any "disruptor" trying to enter would have to burn cash to not only build out the network but to also lower prices to try and steal market share. And the result would really only be 1 BPS saved on each transaction for the consumer.
Nah, they've been fine with cash discounts for a long time. They only became okay with surcharging / adding a fee for cards as a result of a lawsuit in 2013. They'd still prefer businesses offer a cash discount, though. They know customers generally don't take them up on it, but also don't feel punished like they do with a surcharge.
But why would you want to do the credit card company's work for them? That regulation is in place purely because of political bribery by the credit card industry.
The consumer-friendly thing to do is to charge proper rates for things with higher processing fees, like credit cards, and not subsidize them by punishing everyone else.
>But why would you want to do the credit card company's work for them?
I'm not sure I'm following. The reason you'd do it is because you want to pay for a small purchase with your debit card. Like if you run into a gas station and buy a soda and a bag of chips but don't have cash on you.
>That regulation is in place purely because of political bribery by the credit card industry.
It's in place because it was determined that people shouldn't be subjected to a minimum purchase amount for paying with their own money through their debit card. (As opposed to paying with borrowed money through a credit card.)
>The consumer-friendly thing to do is to charge proper rates for things with higher processing fees, like credit cards, and not subsidize them by punishing everyone else.
Again, I'm not following. We're talking about minimum purchase amounts. What's punishing someone else?
Definitely the case for some, I know a lot of developers love Stripe's documentation. But some others just plain equate simplicity and low cost. They have no idea how to read their complex merchant processing statement, there are all these rates and fees.. Square or Stripe comes along, bundles everything into a simple-to-understand rate, and they think it must be cheaper.
It's true that they don't change prices daily, but it's also not particularly uncommon for them to do so. Visa raised an assessment I think last January? And interchange fees have changed several times over the years as well.
There are multiple components to the final rate that a business pays, with the bulk of it being interchange, which goes to the banks that issue cards. Visa/MC only get assessments and dues, which are significantly smaller. (Visa's volume assessment is 0.13%, for example.)
We need to know which fees they're raising, and by how much, to know what sort of impact this will have.
True, although Visa card circulation far eclipses MC, so you could take the gamble that they'll have a Visa. Last I checked, Visa actually had more cards in circulation than all three of the other major brands combined.
Slightly old info, but:
SEC filings for end of 2016 had Visa circulation at 335 million, MC at 200 million, Discover at 51.4 and Amex at 47.5.
The problem is it's not a gamble, it's a percentage. Even if 75% of your customers have a Visa, then 25% of them won't and you risk losing that amount of business by not taking what they do have.
Moreover, that still wouldn't give you competition, because then what incentive does Visa have to give you a good rate if they're the only network you could plausibly attempt exclusivity with? It's like trying to solve a lack of competition by creating a monopoly.
>Being able to use a RFID/NFC reader in close proximity to someones wallet (like in their back pocket, standing ahead of you in line) and being able to charge their card without even touching it is not a very good thing lol.
It's not, but it's also extremely uncommon. The cards people have aren't typically RFID, and NFC has a much narrower range.