Apparently Discover has a market cap of “only” $22 billion. $30 billion or so would definitely do the job; and that’s only, what, less than a quarter of Apple’s cash reserves?
Seems almost… cheap for buying an entire freaking payment network.
I hate my work for saddling me with an Amex company card (in my name) and requiring I pay all my business expenses with it. In Eastern Europe and even Paris (taxis!) they will laugh in your face or at the very least the machine is suddenly "broken". At least give me a card that actually works.
Quite
Visa 500b
Mastercard 380b
Amex 115b
On the contrary, if Apple wants instant and almost ubiquitous merchant acceptance, it would make much more sense to buy a low-volume but wide-reach network than one that's generating lots of revenue from fees, simply because it would be much more capital intensive to finance.
And as explained above, market price is an extremely poor proxy for network reach. Economic success as a payment network takes more than just reach; it’s necessary, but not sufficient.
But acceptance is definitely poor outside the US compared to Visa and Mastercard.
Abroad, they have "roaming" agreements with many other large networks such as JCB, China UnionPay, and Diners Club.
The value of an incumbent payment network isn't the technology or the revenue it generates; it's the network itself (in this case, in the form of merchant acceptance).
You’re saying this as if it’s a “when”, not an “if”.
> no chargebacks to worry about
Chargebacks aren’t something to worry about for customers – they are the reason they feel comfortable giving new merchants a try!
Yes, the fact that Blackrock has now applied for a spot Bitcoin ETF makes it much more "when" than "if".
> Chargebacks aren’t something to worry about for customers – they are the reason they feel comfortable giving new merchants a try!
Correct, but merchants care a lot about how much they fork over to Visa/Mastercard for every purchase. Most people won't care about not paying through a credit card for small retail purchases. (e.g. People know if Starbucks got their order right and can have it fixed right there on the spot)
People dealt in cash long before credit cards ever existed. The scenarios where you really care about the chargeback protection do not make up a majority of purchases and can be addressed through other mechanisms. IMHO, credit cards will still exist in the future, just in a greatly reduced capacity.