[HN Gopher] Justice Department Investigating Visa over Debit-Car...
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Justice Department Investigating Visa over Debit-Card Practices
Author : pseudolus
Score : 61 points
Date : 2021-03-19 16:37 UTC (6 hours ago)
(HTM) web link (www.wsj.com)
(TXT) w3m dump (www.wsj.com)
| endisneigh wrote:
| I'm curious, are there any countries that just nationalize debit
| cards? I understand the value-add of these companies for _credit_
| cards, but I 'm not familiar with the industry.
|
| Couldn't the US Government just give everyone a Treasury Debit
| Card or equivalent? This is totally out of my domain but I've
| always been curious about this.
|
| Even more so recently since the Senate has begun hearings on
| digitizing the dollar
| (https://www.banking.senate.gov/hearings/the-digitization-of-...)
| boublepop wrote:
| In Denmark, you rarely ever ser a pure Visa card, it's almost
| always a "visa/dankort" where the second part is the danish
| national debit card. It's just a natural part of the cards and
| most refer to all credit/debit cards a "dankort".
| toomuchtodo wrote:
| > Couldn't the US Government just give everyone a Treasury
| Debit Card or equivalent?
|
| Absolutely.
|
| https://www.congress.gov/bill/116th-congress/senate-bill/357...
|
| https://news.ycombinator.com/item?id=25262480
|
| https://greatdemocracyinitiative.org/wp-content/uploads/2018...
| CaliforniaKarl wrote:
| To my knowledge, the US doesn't yet have a central widespread
| instant-payment infrastructure (compared to the UK's Faster
| Payments[0]). The US Federal Reserve is working on FedNow[1], but
| that's not going to be released until 2023.
|
| In the meantime, there are all number of financial-industry
| groups including the US Faster Payments Council[7] and The
| Clearing House[8]. Some are just industry groups, while others
| have actual systems in place.
|
| All of this has, in my opinion, led to a lot of fragmentation on
| the front-end. The only instant-payment platform I know of that
| is bank-endorsed is Zelle[4], owned by Early Warning Services[5],
| which is better known for their pseudo-credit reporting agency
| (that focuses on bank accounts instead of credit cards and
| loans[6]). You've also got a ton of third-party apps filling the
| space in the US, including Cash App[2] and Venmo[3].
|
| Within all of this, VISA is in an interesting position, as I
| discovered when I--a credit union member--set up Zelle. When an
| institution is a member of Zelle, you tell you institution that
| you want to associate your phone number/email address with Zelle;
| the bank then does the rest of the work.
|
| As my credit union isn't a member of Zelle, I had to use their
| app to set up an account. After confirming that I don't have an
| account at a member bank, Zelle asked for my debit card
| information. Using that, I have been able to both send _and
| receive_ money instantly. I confirmed this when I received money,
| and saw it appear in my bank account within an hour of getting
| the Zelle notification.
|
| This is a power that I didn't know my debit card possesses. And
| it's why I think this investigation is important. I want to be
| able to move around smaller amounts of money without incurring
| fees, because that will hit hardest on those who can't afford it.
|
| [0]: https://www.fasterpayments.org.uk
|
| [1]: https://www.frbservices.org/financial-
| services/fednow/index....
|
| [2]: https://cash.app
|
| [3]: https://venmo.com
|
| [4]: https://www.zellepay.com
|
| [5]: https://www.earlywarning.com
|
| [6]: https://checkingexpert.com/what-is-early-warning-services/
|
| [7]: https://fasterpaymentscouncil.org
|
| [8]: https://www.theclearinghouse.org/payment-systems/rtp
| quesera wrote:
| > To my knowledge, the US doesn't yet have a central widespread
| instant-payment infrastructure
|
| I don't know how it compares to Faster Payments, but Visa has
| Visa Direct[0], and Mastercard has Mastercard Send[1].
| Collectively "OCT", Original Credit Transaction, a/k/a Push-to-
| Debit.
|
| [0] https://developer.visa.com/capabilities/visa_direct
|
| [1] https://www.mastercard.us/content/mccom-admin/faq-
| category-a...
| Symbiote wrote:
| Faster Payments integrates directly with banks, rather than
| card processors.
|
| It replaces (for transfers under PS250k) the older electronic
| transfer system, BACS.
|
| Otherwise, it looks similar, although Visa/MC is an
| additional middleman compared to Faster Payments, which is
| just between the banks.
| toomuchtodo wrote:
| Long overdue, but to be effective going forward, legislation
| regulating interchange fees is going to be required (as Europe
| does [1]), even with the Fed rolling out instant payments in 2023
| (as mentioned by CaliforniaKarl in a sibling comment).
|
| Tangentially, I'm sure Visa is very concerned (indicated by their
| CEO's comments about buying Plaid) that instant payments is going
| to drive down their payment revenue (considering the UX possible
| with instant payments, such as QR codes for C2C and B2C
| transactions a la Alipay and Wechat Pay in China). The payments
| revenue pie is of course going to shrink when the Fed offers
| instant payments inexpensively (yes, yes, I know there's FedWire,
| but instant payments is going to eat money orders, cashiers
| checks, traditional checks, and everything else being used as a
| shim due to ACH being old and busted).
|
| [1]
| https://ec.europa.eu/competition/publications/factsheet_inte...
| (Warning: PDF)
| londons_explore wrote:
| I would prefer to allow merchants to add a card handling fee.
|
| If some store said "That'll be an extra $3 for MasterCard or $2
| for Visa", I would quickly switch to whichever was cheapest,
| and card issuers would quickly work to offer very low rates so
| customers don't go back to cash.
|
| If you make laws about the interchange rate, then rather than
| competing, all businesses will just charge exactly the maximum
| mandated rate.
| toomuchtodo wrote:
| Merchants are already allowed to charge a card processing
| fee, and no one is competing on the interchange fee.
| Therefore, regulation is required.
| londons_explore wrote:
| Merchants are forced to sign a contract with their card
| processor agreeing not to charge a 'convienience fee' for
| payments by card.
|
| Such agreements that effectively increase prices for cash
| payments ought to be found anti-competitive.
| toomuchtodo wrote:
| In the US, merchants can and do charge a surcharge for
| using a credit card. The court case allowing this is
| referenced below.
|
| https://www.supremecourt.gov/opinions/16pdf/15-1391_g31i.
| pdf
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(page generated 2021-03-19 23:03 UTC)