DOJ accuses Visa of monopoly that affects price of 'nearly everything’

This is really the one we need to fix on both ends.

Right now we have a system where fraud is really easy, e.g. an incompetent merchant gets breached and the attackers get thousands of credit cards to use at innocent unrelated merchants. Then the attackers steal goods from those merchants and the merchants get chargebacks from the cardholders. This is crazy.

What you want is a system where the merchant submits a payment request which is then either manually approved by the customer on their bank's website (e.g. for immediate delivery of goods) or has to be submitted and displayed on the customer's statement at least 30 days before the transfer, giving the customer that long to dispute it (e.g. recurring payments/subscriptions). That would eliminate the vast majority of fraud and also make it simple for customers to cancel subscriptions they don't want (just go to your bank's website and ban that merchant).

The reason we don't have this is that the banks like getting credit card fees and chargeback fees, so they have no incentive to build it, and use regulatory capture and anticompetitive practices to keep anyone else from building it.

It is retail transactions where I and someone/something else trade money for goods that need the "instant" aspects of this.

How is credit a tax on the poor? My very poor family members all are able to access credit cards. They have lower limits, and higher interest because of their credit scores. But they can use them exactly how I do for gas and groceries.

How?

I don't think I can unpack all of the social good / feel bad stuff, but there is no way credit cards are the definition of "rent seeking" unless we combine the HN dogma that "rent seeking = bad" and your opinion that "credit cards = bad" to get "credit cards = rent seeking". Which I don't buy.

What do you mean here? Do you mean you overpay your credit card so there is always a negative balance?

Or, do you mean you treat your credit card like a charge card, and pay it off every month?

If I lend out $X dollars but my client says the loan was accessed fraudulently then who pays for this loss? The bank, the payment processor (FedNow/Visa), the customer, or the vendor?

That seems like a lot of risk for me, if I happen to lose a chargeback for some reason.

What is correct, though, is that while you wait for a credit card dispute process to be resolved, you have not spent any money, and still have that money in your bank account. But if you want to dispute a debit card charge, that money is gone until the dispute is (hopefully) resolved in your favor.

The only way to regulate that problem away is to require debit-card-issuing banks to preemptively return the money to an account immediately after the account holder disputes a charge, which... I dunno, maybe that's not a terrible idea. Or maybe it is.

Sort of.. generally in Europe chargebacks are still pretty rare in general and convincing your bank to make one is non-trivial and takes a lot of time

My credit card in the UK had chip-and-PIN in 2004 - it was probably around earlier too, though less common. Almost every bank card issued has had contactless for over 10 years too. Simply being a developed economy is not the only reason!

(1) the way to define up and coming economies seem to fit into confirmation bias and/or survivor bias.

(2) why is size such a strong variable?

(3) US had massive rollout of dial up, why/how did broadband get established if size of existing infrastructure is inversely correlated to adaption of new tech? (If I understand your argument correctly). Broadband should never really have rolled out. For that matter, there is a large deployment of satellite internet in the US, wouldn't your low earth satellite example also be a counterexample?

(4) why would advancement in one sector be counter evidence for market capture and regulatory hurdles in a different sector? The examples just seem unrelated.

(5) US internet speeds have been pretty slow for a long time. Could it be that market capture and lack of competition is a larger factor rather than the cost of adoption? Another example, Japan has been pretty far ahead of mobile phone tech for a while. If the cost of adaption of new tech were the biggest issue, wouldn't they have stagnated some time ago? That was an already saturated market for over a decade, yet still moved forward.

(6) could it be more important that new markets lack existing monopolistic capture?

Though, I will agree that existing infrastructure/deployments do create an inertia for stagnation. I have that view for US road infrastructure. It is all going to last many decades more, and with it the single occupancy vehicle.

I don't believe them. I think innovation is stymied either by monopoly, regulation or both. I think specifically we allowed monopoly to encroach in an unprecedented way since the Reagan era. I think there are a lot of rich guys breaking the law, the Sherman Act and its kin are real, the DOJ and the FTC have teeth again, America can be innovative in every field and it's time for action.

Enforcing antitrust law is the path to better products and services and maybe even a restoration of wealth equality to some degree, because historically starting businesses was what kept the fruits of the American economic pie more distributed than they are today.

And the key for this is competition and regulation not (yet) captured by entrenched players.

SEPA is Eurozone wide and has existed for 15+ years. Instant payments were only introduced in 2017 but it didn’t take much time for banks in Germany, Italy, Spain etc. to support them.

It's like saying that because Apple is paying a Chinese factory to build phones that Apple "builds phones".

The issue isn't the solution, the issue is the staggering cost of the service in the US vs everywhere else. It's 2x higher in the US, for no good reason other than having a monopoly. In Europe near-instant wiring of money is trivial so for large purchases, businesses can just accept a transfer - so MC/Visa have competition there.

Here, wire transfers are a royal pain in the ass, slow, and expensive, so there's no competition. Zelle and others are slowly changing that, but they mostly compete against paypal for p2p payments, not b2c etc.

However, many customers (1) throw odd change in the tip jar, and (2) an exact amount might discourage add-on purchases.

In this case, an exact amount would certainly result in zero tips. The customer would need appropriate bills and wonder how much would be appropriate (since 15% of $60 is too much).

https://en.m.wikipedia.org/wiki/Psychological_pricing

So instead of advertising a $55 cake that sells for $57.62 or whatever, advertise a $57.33 cake that sells for exactly $60.

"I didn't get rich by writing a lot of checks" -- Bill Gates

Which is why it's reasonable to some that someone getting in trouble for "being a monopoly" is actually getting in trouble for some specific actions they took.

And even if you did want to make that argument, I'm not sure I care to subsidize Visa's profit margins in other places; capping fees in the US to a similar level as in Europe would be fine with me.

(Except maybe not really: I do very well with rewards from credit cards. Mandated lower fees would make those disappear overnight. Of course I can't prove that I wouldn't still be saving more money with mandated lower fees, though. But I think the average person would probably save with capped fees, and that's what's most important from a policy perspective.)

(Of course this presupposes that merchants set prices in order to pass along CC fees to the customer, rather than just charging whatever highest price the market will bear. If CC fees get reduced, prices might stay the same.)

Oh, you mean like how iOS has a private text chat system Androids can't access, and they're only kinda partially giving access to some of the features a decade later? Wouldn't that be crazy.

Nextel had exactly this with the walkie talkie feature and the market sorted it out.

It’ll just take time.

JD Vance has approximately as much policy control in a Trump administration as Kamala Harris would.

Regarding the modern Progressive movement though, I find them a bit too authoritarian for my tastes. There are countless examples but classic Western liberalism is at odds with their ideology. They’ve fallen into the classic revolutionary entrapment of their own power being tied with continued upheaval. If you are not with them completely then you are the enemy. From the Google Manifesto to JK Rowling’s cancelling, they remind me of the mob during the French Revolution. They just eat their own and refuse to accept any kind of meaningful critique.

Liberalism requires debate, disagreement and questioning the status quo. I don’t see that amongst the modern Progressives. They would rather burn it down than build something better.

Ironically, I fear them gaining power as much as I do the religious right. Neither contains the capacity for building the coalitions needed for stable governance. I like moderates. Stability. Peace. Compromise. Mutual Respect. Empathy. I just don’t see those values in those circles.

Now that I’ve politely disagreed, I suppose it’s just a matter of time before someone comes along to insult me and prove my point.

There is no political party that demands this. I've worked 100% since the start of the pandemic and have only been asked for proof of vaccination for a company onsite. Never once been at threat of losing my remote job because of vaccination status. Sounds like your company was just looking for an excuse to lay people off.

> And that erosion of bodily autonomy at the federal level led to the _easy_ overturning of Roe v Wade! At the time the federal vaccine mandates were announced, I called it that they were weakening Roe. Play stupid games, win stupid prizes.

Really? You should've told the Supreme Court because they didn't mention vaccines at all in their decisions to overturn Roe v Wade.

> There's not one good policy for humanity coming from them and certainly far too much optional war and needless killing.

This is not even remotely true and is so emotionally charged that it is impossible to actually have a discussion. I much prefer their policies on public infrastructure, environment, and climate just to name a few.

1. What’s the best place to research FTC win rates?

2. Given that Khan is taking an “aggressive” approach to what sorts of cases the FTC should pursue, wouldn’t it make sense for the win rate to be lower under her leadership?

If a customer walks into your store and has exactly one (type of) card on them that they want to use to pay, you have a choice of accepting that card or losing their business.

This makes competition between payment methods at the POS structurally very hard.

Despite it existing since the 80s, there's been constant pressure / lobbying to get rid of it.[1]

[1]: https://www.theglobeandmail.com/report-on-business/interac-i...

A random corner store or online retailer does not have that luxury; they have to accept whatever their prospective customers have on them (and to a lesser extent prefer, if they have multiple brands' cards).

Bank debit cards in the US all also use Visa or Mastercard networks.

The only two semi-exceptions:

- during a MC-sponsored event, you had extra fast lanes when paying with MC (Roland Garros in Paris)

- Ryanair (low-cost airline) would accept free payments only with some niche cards (Visa Electron, Mastercard prepaid) and charge like 10€ extra per flight segment for any other card, until I think EU forbid it.

I'd guess it's pretty high in the US...

Actually accurate. "Merchant bank" is not the card holder's bank - it is the bank that actually settles transactions with the issuing bank (i.e. your credit card) and then deposits money into the merchant's actual bank account. Money flows through the merchant account. Incidentally, the merchant bank is at risk for fraudulent merchants as they are often advancing money (a few days early) to the merchant in anticipation of settling. Merchant banks can shut down merchants and they also have the power to require the merchants to leave an amount of money on deposit with them to mitigate risk.

> My bank does not offer the ability to reverse transactions or replace funds lost to merchants

Correct. Your bank does not have that power - you have to initiate a chargeback, and that is ultimately handled by the MSP. Incidentally, if you have a credit card, the issuer (often a bank) initiates the chargeback process.

Call me old fashioned, but if that's a thing you want to do in a democracy, there should be a legal basis passed through the legislative branch...

Avoiding a category like that (or holding it to stricter standards) seems rather reasonable.

How much did visa pay in taxes? Less than a single 140k family? Why are we comparing corporate taxes and individual taxes? They are completely different.

My hot minute is that corporations don't pay taxes, consumers do via higher product\services prices, investors do via lower investment returns, or the employees do via lower wages.

And the bonus, the government gets less taxes from those lower investment returns and lower wages.

What if the seller goes bankrupt after accepting payment, but before shipping an order? What if they're an outright scammer? What if the buyer says they are, but the real scammer is the buyer?

Somebody's got to figure all of that stuff out. The established card schemes provide a framework for that. It's flawed, it's taking a ton of automated and manual resources, nobody in their right mind would rebuild the same thing if given the opportunity from scratch, but it's there and it kind of works. That's a lot better than what crypto has to offer.

For every success story that people were skeptical of there have been a thousand failures that people were just as skeptical of. "People also made fun of ${success}" is meaningless as a defense of any technology.

As I noted in my reply: middlemen are inevitable and already dominate the crypto space. If your plan for a crypto future doesn't plan around the inevitable middlemen you're already doomed to failure.