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Comment by BrandonS113 | Hacker News Reader

One reason to like the visa mastercard duopoly. They work everywhere. I go to the Netherlands a lot for work, and it is a real pain as they have their own payment system, IDEAL, one needs to live there, that is closed to foreigners. Many vendors, especially outside of main tourist areas will not take foreign cards. Guess they don't want to pay 0.1% fees. Yesterday, was left embarrassed in Albert Heijn where they only took Dutch cards and I did not have enough cash. (some AH do, most don't)

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But as you just discovered, they don't work everywhere. Plenty of Dutch and German stores don't accept them. Visa and Mastercard interchange fees are nowadays capped to 0.3% by law, but they used to be 2%+ (and still are in the USA AFAICT), that's why historically Dutch and German retailers shunned them. Why pay 2% to accept a few more cards from foreigners and tourists when 99% of your customers already have a 0.3% fee card (Maestro or VPay)?

Also, the Dutch iDEAL system might form in important building block of a European home-grown payment solution, that hopefully will give the Visa/MC duopoly some actual competition: https://en.wikipedia.org/wiki/European_Payments_Initiative

I agree. But plenty of Dutch vendor only accept Dutch mastercards and not foreign. The fee s the same. WHY? And foreigners can't get IDEAL or Dutch mastercards. I have gotten used to carry a lot of cash when there. Fortunately, Holland is safe. Someone looked at me very funny when I payed them EUR 500 in cash last week.

But we also know why a European home grown payments system is not happening. The incumbent banks hate it and have enough power to block such solutions.

Here are the transaction costs for a retailer at the largest Dutch bank:

- Maestro, V PAY, Debit Mastercard en VISA Debit issued in Europe: €0.047-€0.06 per transaction

- iDEAL: €0.35

- Mastercard en VISA creditcards issued in Europe: 1.70%

- Mastercard en VISA creditcards and debitcards issued outside of Europe: 2.50%

https://www.ing.nl/zakelijk/betalen/tarieven/betalingen-binn...

For a €100 payment, we're looking at €0.06 debitcard transaction vs €1.70-€2.50 creditcard. If I were a Dutch retailer outside of areas/sectors with a lot of foreign/tourist business I probably wouldn't bother with credit cards either, as probably 99%+ of the Dutch have Maestro, VPAY or cash.

The actual problem is that merchants are not allowed to charge payment fees to their customers.

If you had to pay the fees as a customer, free market forces would do its job.

I have European debit cards. They get rejected in many Albert Heijn when Dutch cards (debit and credit) are taken. Jumbo takes foreign cards. Jumbo gets my (and a lot of my colleagues who pass though) business, AH not. Many restaurants take Dutch credit cards and not non-Dutch European credit cards. I went to a restaurant that takes Bitcoin but not EU debit (and Bitcoin transactions costs are much higher)

So if the fees on non-Dutch European and Dutch cards are the same, what explains this? Xenophobia? That is what my colleagues in Holland say.

There is no such thing as a generic "European debit card". Dutch retailers accept specifically only Maestro, VPay, MasterCard Debit or VISA debit cards, but usually not not VISA Electron, or various other other country-specific European debit cards like Bancontact or giropay or EC. Albert Heijn (except in a few stores in Amsterdam and Schiphol) doesn't accept any credit cards and does not distinguish between domestic or foreign. It's a matter of costs, not xenophobia.

Retailers just choose from the options from their bank, which are the debit card I already listed (Maestro, VPay, MasterCard Debit or VISA debit), and optionally VISA and MasterCard credit cards (which are separate from their debit cards). Retailers do not have the option of accepting Dutch Maestro/VPay but excluding Maestro/VPay issued elsewhere in Europe. They do have the option to exclude credit cards altogether, and many do for the reason of € 0.06 transaction cost vs 1.7% and that around 100% of Dutch account holders have one of (Maestro, VPay, MasterCard Debit or VISA debit). Xenophobia has nothing to do with it, any more than retailers in your countries might not accept Bancontact, giropay or UnionPay cards.

Outside of main cities and Germany is the same for restaurants and cafes. Pita

As a tourist, though, a pro tip is that big banks in Germany charge for deposits, not withdrawals, so if you happen to have a debit Mastercard with no exchange fees (e.g. in Canada, EQ Bank or WealthSimple), you can use your Mastercard at a bank ATM completely fee free and at Mastercard exchange rates. Plus it doesn’t matter which bank you go to, just pick the nearest name brand big bank ATM and you’re good to go.

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