[HN Gopher] Visa and Mastercard: The global payment duopoly (2024)
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Visa and Mastercard: The global payment duopoly (2024)
Author : bilekas
Score : 102 points
Date : 2025-07-24 21:39 UTC (1 hours ago)
(HTM) web link (quartr.com)
(TXT) w3m dump (quartr.com)
| gchamonlive wrote:
| Related https://news.ycombinator.com/item?id=44657517
| everyone wrote:
| The fucked up thing is how they are enforcing archaic puritan
| ideals on the whole world. Acting as self appointed global
| censors. (Eg. not allowing adult games on Steam or Itch.io)
|
| The most confusing thing for me is why. I have read a few
| theories, but nothing convincing. What could be a strong enough
| motivator to do such a bizarre thing?
|
| Also we need governments to keep them in line. We cant have
| private corps acting as de facto censors like that. Its
| completely undemocratic and unethical.
| shortrounddev2 wrote:
| I've heard that Mastercard is running by evangelists
| greenavocado wrote:
| This is the wrong question to ask. The right question to ask is
| what is preventing other payment processors from seamlessly
| getting in front of the customer, at every retail location, and
| online? If other payment processors existed and were allowed to
| flourish, we would not give a damn if these two blocked 90% of
| transaction types. Instead, something is suffocating innovation
| and personal freedom.
| skissane wrote:
| > Acting as self appointed global censors. (Eg. not allowing
| adult games on Steam or Itch.io)
|
| It seems extra illogical when you think of how much money they
| make from subscription adult websites, even brothels-in
| countries that have legal brothels, I think you'll find many of
| them accept credit cards, and Visa and Mastercard don't appear
| to have a problem with that
| krapp wrote:
| >What could be a strong enough motivator to do such a bizarre
| thing?
|
| Money. The only two motivators for a capitalist entity are
| making money and avoiding any government interference with
| making more money.
|
| They certainly aren't doing it out of Christian principles.
| mschuster91 wrote:
| > They certainly aren't doing it out of Christian principles.
|
| Said Evangelicals unfortunately know how to raise a stink,
| and with stinks comes bad press or, even worse, haphazard
| attempts to regulate stuff. Or, under Trump, it might draw
| the ire of the Dear Leader himself and suddenly even a
| company like MC/Visa finds itself in hot water.
|
| Either of these results is expensive, much more a cost risk
| than the profit of something like Itch is worth.
| netsharc wrote:
| Something to do with https://www.pillsburylaw.com/en/news-and-
| insights/prosecutin... ?
|
| > In particular, the TVPA imposes criminal liability upon
| corporations that benefit financially from human trafficking in
| "reckless disregard" that their business ventures engaged in
| such exploitation.
|
| Not that digitally generated tits and asses have anything to do
| with human trafficking. But for a payment provider, porn sites
| are risky because their upload filters can miss content that
| violates these laws..
|
| Russia's exclusion from Visa/Mastercard means cards there are
| on the Chinese networks and Russia's internal one.. it'd be
| interesting if adult content providers adopt these, bur I guess
| that means working with a Russian financial institute, which
| risks embargo from the US.
|
| Imagine that, your porn stars ending up on the US embargo
| list...
|
| Meanwhile, on the topic of human trafficking, Trump is
| panicking about being in Epstein's files...
| robbiewxyz wrote:
| This is an important topic. I wonder what it is that makes
| duopoly so prevalent in tech e.g. Apple vs Google for mobile,
| Apple vs Microsoft for desktop, Uber vs Lyft for ride sharing.
|
| As for the linked article, it reads too much like AI slop for me
| to be bothered to analyze any of its specific points. If it's not
| AI, someone please correct me.
| shmerl wrote:
| Toothless competition law enforcement doesn't help it.
| thewebguyd wrote:
| Not just toothless, but also focusing on the wrong thing. Our
| antitrust laws haven't kept up with tech. They are still
| largely focused on consumer harm, which doesn't apply well
| when huge tech companies can offer stuff for free at a loss
| to snuff out any potential competition.
|
| Instead we need antitrust legislation to look at unfairly
| favoring one's own service, attack bundling, and prohibit
| exclusionary practices/blocking access to protocols (Private
| APIs, basically Apple).
|
| To use Apple as an example, we could legally mandate they
| provide APIs for third parties to access iMessage, AirDrop,
| SharePlay, etc. on their OSes so that third parties can offer
| accessories and services that compete on the same playing
| field as Apple's own accessories and services. Without
| mandating that openness, there can be no competitors. I can't
| make a smartwatch for iPhones and have it able to compete
| with the Apple Watch, Apple just simply gatekeeps and won't
| allow it - that should not be legal. Likewise for wireless
| headphones - no one else can make a set of wireless earbuds
| that can do device switching on Apple devices to the same
| level as AirPods, because Apple is gate keeping with
| proprietary tech.
|
| The non anti-trust aspect of it with tech is mostly network
| effects. For mobile, the more users, the more apps, the more
| valuable that platform gets, starts to incur high switching
| costs, devs neglect or ignore any potential new entry into
| the market because it's not profitable to build for it, and
| that momentum is very difficult to overcome without
| regulatory action.
| speak_plainly wrote:
| Related: https://www.pcgamer.com/software/platforms/valve-
| confirms-cr...
| Aerroon wrote:
| Now this is a "tech company" problem I wish the EU would tackle.
| Why do these American companies get to decide what I'm allowed to
| purchase?
| topdan wrote:
| China is a footnote in the article, but their story here is
| interesting. China's WTO accession commitments in 2001 agreed to
| open its financial services sector, including payment card
| services, to foreign companies, except they never did.
|
| The US sued (presumably on behalf of VISA and MasterCard) and won
| in 2012: https://ustr.gov/about-us/policy-offices/press-
| office/press-...
|
| MasterCard just started being full offered in 2024. VISA still
| has not. In the meantime, China built their own dominate
| offerings, essentially avoiding the duopoly.
| Telemakhos wrote:
| Not only have they avoided the duopoly: they've avoided
| dependence on US tech and US financial surveillance/control.
| The EU depends on Visa/Mastercard for cross-border transactions
| especially, and they've never been able to get their act
| together well enough to establish a home-grown, EU-wide payment
| rails system that would give them independence from US
| processors should they need that independence. That's a lesson
| that Russia learned back in 2014 and remedied with its Mir
| rails.
| robjan wrote:
| It's interesting that they are a footnote given that UnionPay
| is larger than Visa and MC with nearly half the entire global
| market
| pavlov wrote:
| The credit card duopoly is another instance where the EU has done
| a good job with regulation, but everyone just takes it for
| granted until they're reminded how much worse the rest of the
| world has it.
|
| In the EU, card payment fees are capped at 0.2% for debit cards
| and 0.3% for credit cards. In the US, these interchange fees are
| about 2%.
|
| US businesses pay over $100 billion annually in these fees to
| card networks. If the fees were capped like in the EU, 85% of
| that money would stay with the businesses rather than feed the
| duopoly.
| itake wrote:
| Is there information on EU vs US credit limits?
|
| How do the account fees compare between EU and US?
| cbzoiav wrote:
| Most credit cards in the UK at least (same cap) have no
| standard account fee. Those that do come with other perks /
| beyond the 'world elite' etc side Mastercard/visa aren't
| seeing that money - its going to the issuing bank. Bank
| accounts also generaly have no standard fees (and a lot of
| other things we take forgranted - faster payments (if I send
| money to a friend/business I can do it instantly for free
| without needing a third party solution), standing orders,
| direct debit etc. - that make banking far easier than in the
| US).
|
| There is also regulation in place that restricts predatory
| fee practices, getting customers into revolving debt and
| protection that makes card issuers liable for purchases
| (Section 75 - e.g. if I order something paying with my credit
| card and the merchant doesn't pay, the card issuer is legally
| liable / I can claim from them and its on them to get it from
| the merchant)
| alexriddle wrote:
| Other than Amex for airline points I don't spend a penny on
| banking, all the standard services (eg transfers, bill
| payments, cash withdrawals, deposits) are free (in the U.K.)
| with no monthly fee.
| carlhjerpe wrote:
| I pay 3EUR per month to "Nordea" for "unlimited" accounts and
| one VISA debit card.
| 867-5309 wrote:
| that's only a very recent change, and not universally rolled
| out. for decades shops charged ~PS3 "connection fee" for paying
| by credit card, no matter the purchase amount, and many still
| (probably illegally) enforce a minimum spend if paying by
| credit or debit card. like when paying or withdrawing money
| abroad, it's just a lottery as to the "fees" you'll be charged
| not because there _are_ such fees, but because someone in the
| '70s created super advanced tech to detect usage outside the
| country of issuance, and everyone got used to that
| benced wrote:
| People always cite the first-order benefits of this regulation
| but don't look into anything else. To be clear, I haven't
| either but what I would look for is: - are real prices cheaper
| for consumers? - is economic activity higher or lower (i.e.
| maybe credit cards encourage purchases?) - does making credit
| cards a less lucrative business lower credit card penetration?
| - is lowering credit card penetration, particularly for people
| bad at doing interest math a good thing? - is making cash or
| debit cards relatively more appealing good?
|
| My vague impression is that the studies on these questions are
| mixed (am I wrong? A quick Google found several EC funded ones
| which I'm a little suspicious of). Note that the US has 4
| credible payment processing networks but the fees have remained
| constant. My suspicion is that 3ish% is the optimal value or a
| very large anti-trust investigation (not a price cap) is in
| order.
| colesantiago wrote:
| So what is the solution to this duopoly except for crypto?
|
| I envision a third payment processor that isn't Visa or
| Mastercard and not even crypto.
|
| It isn't Stripe or PayPal either, something completely different.
|
| Thoughts?
| qznc wrote:
| I hope Wero will spread rapidly in the EU. It is SEPA
| underneath.
| sdeframond wrote:
| Hmm, Carte Bleue ?
|
| Edit: oh, that's Visa Europe now...
| drdrey wrote:
| why not crypto? stablecoins could be a credible answer to this
| problem
| hugs wrote:
| Unfortunately answering question with: "yes, crypto". (Sorry?!)
| the Bitcoin Lightning Network could be a very good backend
| base. You can even try it today (Using Cash app's built-in
| Lightning support to buy a meal at Steak 'n Shake.)
| pogue wrote:
| Bring back Lina Khan and her monopoly crushing super powers. We
| need another Teddy Roosevelt type character to be our trust-
| busting savior or these companies will continue running
| roughshod over us until they've privatized the air we breath
| and are charging us a subscription fee for it.
| TulliusCicero wrote:
| Maybe something like India's UPI?
| https://en.wikipedia.org/wiki/Unified_Payments_Interface
| mzitelli wrote:
| Brazil central bank introduced Pix a few years ago. It took over
| the country as the public basic infrastructure for money
| transfer. Totally free and instantaneous transactions between
| people and companies, available to all banks.
|
| Then, just last week, the US presidency launched an investigation
| considering Pix an unfair trade practice against the US.
|
| Actions like that may show the current direction of the US
| government is aligned on preserving status quo. But still, I
| wonder how impactful a public digital infrastructure for the
| dollar would be.
| kyrra wrote:
| My understanding is that Pix took over because the Brazilian
| gov did transfer payments during covid and the (only?) way to
| get those payments was via Pix. So it forced everyone to start
| using it. And once people had more familiarity with Pix,
| merchants started pushing for it because it charges ACH level
| fees.
|
| The chargeback system (MED) is only so-so right now, but
| expected to get better.
|
| There is a lot to like about Pix, but the spec is extremely
| complicated and hard to implement.
| forinti wrote:
| I started using Pix, because it's the best way to do business
| with Chinese ecommerce sites.
|
| You don't have to give your credit card details and refunds
| go straight back to your account.
|
| In fact, it really impressed me that Aliexpress got it
| working before many Brazilian sites.
| anodari wrote:
| If you use an intermediary, implementation is usually very
| simple and straightforward. The biggest challenge is
| becoming a direct participant--that is, communicating
| directly with the central bank. In this case, you need to
| enter the regulatory framework and become a payment
| institution.
| forinti wrote:
| It's totally unfair that they don't get a cut from other
| people's business. /s
| frankfrank13 wrote:
| in like 2011 I saw Daniel Radcliffe in How to succeed in business
| without really trying, and there's this line
|
| > And other men may carry cards, as members of the Diners
|
| that i did not understand until a few years ago someone mention
| the show, I remembered the line. And now at this moment, where
| this article reminded me of the Capital One acq. of Discover
| which happened to own Diner's, I can't help but think of this
| zombified credit card company limping along.
|
| Sign me up for the Diner's platinum, which I have to assume will
| get 5x points at the five-and-dime.
| rprend wrote:
| Speaking as someone who tried (and failed) to build a competitor,
| merchants don't actually care about the fees. We built a mobile
| payment system using bank transfer rails (ACH debits and FedNow
| credits) for ecom platforms. QR payments, just like AliPay, but
| for the US. We studied past failures at this same idea, and
| targeted specifically high ticket items (jewelry, luxury),
| because the fees are a bigger problem, and we could solve other
| problems with pay-by-bank like limiting botting/scalping and
| providing digital proof of purchase for resellers.
|
| We raised some money, built it, and demo'd it to dozens of
| different business. Instant clearing, way cheaper fees, bundle
| fraud insurance, digital proof of purchase. But it was an uphill
| battle- people didn't want it.
|
| Merchants might say they care about the fees, but in practice
| they care about conversion and getting sales. If you want them to
| act you need to promise to bring in new revenue, not reduce their
| cost of existing revenue.
|
| Second problem is the rails. Your only option to debit is ACH,
| and ACH's can be returned by the customer for any reason up to 60
| days after the debit. Even with return-risk profiling, we had
| issues with Russian fraudsters using stolen SSNs to onboard as a
| merchant, do a "custom jewelry" sale for thousands, then as soon
| as the merchant gets paid out, ACH R10. The "merchant" has RTP'd
| that money away so when we try to debit it NSFs.
|
| RfPs on FedNow (if they ever get widely adopted) would solve
| this, because at least they're irreversible. Until then the only
| competitor is crypto, but good luck getting US consumers to use a
| different currency at checkout without tanking your conversion
| (people have tried!!)
| zamadatix wrote:
| Not being the #1 priority is not the same thing as not caring.
| devnonymous wrote:
| The last section in the article speaks about RuPay but isn't this
| just one of the many implementations of UPI[1] ? In any case,
| imo, it is the start of the end for the duopoly and it is my hope
| that an truly open standard and protocol (unlike UPI) emerges
| (and no, the blockchain is not it -- crypto would just be
| accidental complexity in any potential solution).
|
| [1] https://en.wikipedia.org/wiki/Unified_Payments_Interface
| umeshunni wrote:
| RuPay isn't an implementation of UPI - it's an alternate
| payment network like STAR etc in the US. As a matter of fact,
| it's only recently that RuPay and UPI were connected:
|
| From 8 June 2022, RBI allowed the linking of RuPay credit cards
| with India's Unified Payments Interface (UPI). In the absence
| of a physical card, customers can use their credit limit
| through for transactions.
| throwaway328 wrote:
| Reading Barrett Brown's "My Glorious Defeats" at the moment,
| being reminded of that time Anonymous went after Visa,
| Mastercard, and others, in retaliation for them blocking payments
| to Wikileaks.
|
| An action the payment companies took extrajudicially at the
| behest of the US government because the US gov was't happy with
| Wikileaks. Wikileaks' crime was that they'd been very successful
| at getting true information to the public about what governments
| were doing.
|
| This was quite shocking to me (and at least some others,
| presumably) at the time, in 2011. I guess if we were taking it
| seriously, we would have been obliged to say: oh, how
| fundamentally authoritarian and anti-democratic.
|
| When progressives/democrat/left types shout "fascism!" now on
| account of something Trump did or said, the cynical part of me
| says that a lot of them probably just want Obama/Clinton/Biden-
| flavoured authoritarianism rather than "ugly" lower-middle-class
| Trumpian authoritarianism.
| DmitryO wrote:
| Mir works in around 10 countries not bad for a start
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