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Comment by toomuchtodo | Hacker News Reader

If the US regulated interchange fees like Europe did (In the EU, interchange fees are capped to 0.3% of the transaction for credit cards and to 0.2% for debit cards, no cap for corporate cards), everyone would still get the benefit of cashless transactions without the processing rake credit card processors and related entities take.

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Worth noting that credit card processors do take on credit risk, which for "normal people" is, sure, basically negligible. But black swan events (covid, for example) and fraud attacks (card cashers etc etc) are major issues.

This might be mitigated by the dominant form of payments in the regulated marks you mentioned being debit cards, which in some ways flips the equation on risk around.

However, this might not sit well with consumers. Lots of people in the US like credit cards because of the substantially superior risk profile they present (to the cardholder).

> Lots of people in the US like credit cards because of the substantially superior risk profile they present (to the cardholder).

How so? Fraud liability?

And headache. If there's fraud in your debit account, it's a big problem for you because the USD that got stolen were yours. That's less money you can now write a check for.

Versus with a credit card, the money that got spent is only barely yours. Sure you're gonna have to dispute it etc but if it comes to it, you could always just let the account sit with a balance while a protracted dispute process works through.

Let merchants charge customers the credit transaction fee as a surcharge [1] [2], and let consumers pay to receive the benefits if they so desire. Everyone else can use debit cards now, and instant payments when they arrive in 2023-2024 [3] [4]. If it's transaction insurance customers demand, let them vote with their dollars (versus mandating everyone pay it as a transaction tax).

[1] https://usa.visa.com/dam/VCOM/download/merchants/surcharging...

[2] https://www.mastercard.us/en-us/business/overview/support/me...

[3] https://news.ycombinator.com/item?id=24103753

[4] https://www.federalreserve.gov/newsevents/pressreleases/othe...

If card processors cared about fraud they would have rolled out chip & pin 20 years ago. They don't and the fees aren't that high because of it. The fees are so high for the profit and the stupid minigames that trick americans into having a wallet full of plastic cards for "savings" and "cashback".

Is chip & PIN a worthwhile investment into security, considering the growing number of online transactions?

Ha. Other fees nearly always take this above 1%, often closer to 5% and as far as 20% only sub dollar transactions. Other fees are your scheme fees of which there are many, avs fees, and your acquirer fee (the people who take the chargeback risk - e.g. adyen 0.65%)

That may be true for ecommerce.

But for physical card-present EMV transactions the rates are typically under 1% in Finland, see comparison: http://www.maksupaatevertailu.fi/ (in Finnish)

Nets is the most common physical merchant services provider here, I believe, which has 0.41% for Visa/MC debit and 0.91% for Visa/MC credit (though there are surcharges for foreign cards etc.).

Valid point, I refer to card not present tranx, but are you sure the 0.41% is when via the mc/visa network though (even if we accept an interchange of 0.2x), many of these cards in europe have an alternative national pay network for local cards - you will actually see the choice on some POS screens too. And asia too - TPN dual branded with err can't remember that name of the Chinese pay network that has failed to infect se Asia now, ah unionpay

Yes, AFAIK there is no local payment network in Finland (unless it is completely hidden from users and merchants somehow), and Finnish cards are definitely not co-branded.

The Nets rate for non-Finnish in-EU debit cards is 0.51% and for non-EU debit cards it is 1.71%, and +0.80% for corporate cards (all 2017 rates and for Visa/MC only).

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