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Comment by pcarolan | Hacker News Reader

In Australia, this is regulated and they can charge no more than 1.5%. https://www.accc.gov.au/consumers/pricing/card-surcharges

This could be changed overnight with 1 piece of legislation.

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The American system is too deeply tied to capital to have a policy that actually helps citizens and small businesses get passed. The second a government official proposed something like this, the espionage arms of the credit card corporations would come down so hard on them and arrange for them to fail their next appointment (through "lobbying")

CC companies are genius.

They charge companies 3% -> companies embed that 3% in their prices -> customers get a 1% refund from CC companies.

- If you do NOT use a CC, you effectively pay _more for CC users_ (3%!).

- CC companies make the customer feel like they have a benefit, while in fact, they are net payers too (2%).

- They have access to all (private) data of the customer, which is extremely powerful in this age and time.

I honestly have no idea how the hell the US public is still deluding itself to not make this illegal.

Are the only ones that get it so content with their 1-2% pieces of silver that they're fine in trading the wellbeing of the less fortunate?

On the one hand, 3% cc fees are much higher than what would be set by a competitive market and are only possible with an oligopoly. On the other hand, the convenience that they allow for not carrying cash is often worth more than the 3% to consumers/merchants like me. E.g. any online payment. So while it's massively overpriced, it's still a win win usually, and I think that's probably why people aren't madder about it.

Yeah, the convenience of having drinkable tap water is also worth >3% of your net income. But luckily, because of competitive markets, it's often <0.1% of your income.

Isn't water one is the canonical examples of a natural monopoly?

what city in the US has a competitive water distribution system?

You say "only" as if this isn't the majority of the american bourgeoisie.

Pretty much all of finance, Landlords, IP trolling - the rich will unashamedly collect undeserved rent on anything they can up to and slightly over the line of the law.

It's a prisoner's dilemma. If we collectively switched to a payment system with lower transaction costs, we would all be better off. But as an individual, it is in your best interest to use the credit card with the highest rewards program, because you have to pay that extra 3% either way.

Agree, and specifically for prisoner's dilemma/tragedy of the commons scenarios we have the option of regulation, which corporate propaganda has labeled as "government intervention is always bad".

And we also taught our children to be ethical and aim to do good, even in school, which helped.

You've articulated the exact sentiment that I have to others before.

What can we do about it? Is trying to out-lobby i.e. regulate the CC companies the only way? I noticed that other countries don't seem to have this problem.

What prevents a new credit card company coming in and competing with a 2% transaction fee and undercutting visa/square?

Is it barrier to entry? Or would such hypothesized credit card company eventually cave to greed once they got big enough and move to 3% fees?

Evil genius

Debit card interchange fees have been regulated (aka price controls) in the US since at least 2011 https://sgp.fas.org/crs/misc/R41913.pdf

That article is about businesses charging excessive surcharges to customers (e.g. Jetstar back in the day charging 5% extra for Visa/MasterCard, when it only cost them 0.7%).

There are no laws against high processing fees; Afterpay takes around 8% for example.

There is in the EU, at least:

> Specifically, the regulation:

> * caps interchange fees at 0.2% of the transaction value for consumer debit cards and at 0.3% for consumer credit cards;

From https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...

No cap on corporate cards, though.

That, too, could be solved with 1 piece of legislation.

There are, and both Visa [0] and MasterCard [1] have both recently been in trouble for it. Instead of it being a specific maximum, however, it must be "reasonable" and allow for competition. The network also chooses the cheapest routing, by default.

[0] https://www.accc.gov.au/media-release/visa-undertakes-to-add...

[1] https://www.accc.gov.au/media-release/mastercard-in-court-fo...

In the EU, those caps are 0.2% for debit cards and 0.3% for credit cards.

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