[HN Gopher] Zenobia Pay - A mission to build an alternative to h...
___________________________________________________________________
Zenobia Pay - A mission to build an alternative to high-fee card
networks
Author : pranay01
Score : 237 points
Date : 2025-08-14 02:19 UTC (20 hours ago)
(HTM) web link (zenobiapay.com)
(TXT) w3m dump (zenobiapay.com)
| soared wrote:
| Super interesting read! I work in payments for context and see
| tons of different payment methods every day. People tend to find
| a payment method they like, and really only ever use that one
| method. It's very hard to get someone to switch - even if an
| alternative is better. It's just so ingrained to swipe that same
| card, click the same autofill button, etc.
|
| Digital wallets did somehow over come this, and those would be a
| super challenging but potentially valid approach #4. If Zenobia
| is in Apple Pay, google pay, link, etc it's natural and easy for
| customers, saves money for merchants, and disrupts visa/etc
| without disrupting anything else (ie making people us QR codes).
|
| Tough problem. You need a Jony Ive on your team to help solve it.
|
| Or do like pix and give everyone $1500, but only if they use
| Zenobia :)
| lelanthran wrote:
| > Tough problem. You need a Jony Ive on your team to help solve
| it.
|
| I don't think so. A Jony Ive will not be in a position to solve
| the actual problem - what use is a non-universal payment
| mechanism to consumers and to retailers?
|
| I read the linked page and don't see answers to the main
| adoption problem: how is the purchaser supposed to pay?
|
| 1. Purchaser has to download the app? Okay, but purchaser
| already has a few equivalents on their phone (Pix, etc) - added
| friction!
|
| 2. How does the App get money to make payment? Purchaser has to
| fund a new account? Okay, but that is more friction!
|
| 3. How does merchant accept the payment? Do they need a new
| payment terminal? Must their payment terminal be updated with
| new software? Even more friction!
|
| I've worked in the EMV space, even quite recently, and
| merchants _do not want to update_ and will only do so when
| forced to. Any new payment system (QR codes, etc) needs around
| 5 years (maybe more) before it is universally accepted.
|
| The best way, where I am, to rollout a new payment terminal is
| to pitch it to the banks, who then offer it to the merchants
| who have accounts with them.
|
| Adding new functionality to EMV terminals is a lot easier these
| days, since most of the new terminals are Android, and the
| vendors have app stores for third parties to write software for
| these terminals (Pax has Maxstore, etc).
|
| Now, maybe I missed it, but I did not see this application on
| Maxstore, or some of the other stores. I could have missed it,
| because these stores have literally thousands of payment
| applications.
|
| The long and short of it is, you came up with a non-universal
| payment method, and predictably it did not take off.
| quesomaster9000 wrote:
| I'd argue that the problem is that QR codes shouldn't be an
| 'app' problem, and yes there's a chicken-egg problem with PoS
| terminals verifying incoming bank payments but that's a
| separate issue.
|
| If you want to do account-to-account payments you can show
| the customer the account/routing number, amount & invoice ID
| - but obviously that's high friction and the customer needs
| to login to their account and send a payment with lots of
| manual data entry.
|
| Making yet another app, adding a financial intermediary,
| requiring you to link your bank account - these aren't
| solving the friction points.
|
| We already have bank apps, when I scan a QR code in an
| industry-wide format it should ask me or confirm which bank
| app to open and pre-fill all the payment information.
|
| So from my perspective, the problem is that FedNow in the US,
| and Open Banking in the UK - they could have just dictated
| "Banks must support EPC QR, or EMV QR code scanning and deep-
| links", and QR code payments would happen very quickly - even
| with NFC/RFID you can do passive scanning to achieve the same
| thing.
|
| * Choose Account * Confirm details * Press send
|
| That's about as easy as you can get for push payments, with a
| real industry-wide standard for communicating payment intents
| via NFC/QR. But both FedNow and UK OpenBanking are structured
| in a way which requires friction, and onerous regulation,
| through their clunky APIs - meaning you can't actually solve
| that problem on your own.
| myflash13 wrote:
| Yup it's that simple. That's how QR code payments work in
| many countries in Europe.
| lelanthran wrote:
| I think my main point still stands: a Jony Ive type person
| would not be any help whatsoever.
| ttoinou wrote:
| The best players to disrupt Visa Mastercard duopoly would
| rather be a consortium of payment processors such as Shopify /
| Stripe / Google Pay / Apple Pay and banks taking in sandwhich
| Visa and Mastercard (where the money is stored, where the money
| is spent)
| closewith wrote:
| Pix, UPI, etc have definitively shown that Governments are
| the best players to disrupt the Visa/Mastercard duopoly.
| ttoinou wrote:
| There might be survivorship bias here. One could also argue
| that Governments are the best players to get and maintain a
| monopoly or duopoly (:
| closewith wrote:
| Well, that's definitely true, and it's also how the
| MasterCard and Visa monopoly remains dominant. Just look
| at the extreme backlash of Trump's administration against
| the Brazilian Central Bank's plans to sell the Pix
| protocol abroad.
| myflash13 wrote:
| There's a geopolitical reason for this. Ability to print
| a world reserve currency and apply sanctions to control
| capital flow are among the primary tools of American
| power.
| closewith wrote:
| Yes, I'm aware. The dominance of the dollar and the US
| financial services corporations is no accident.
|
| This further reinforces that it's a government that's
| maintaining the Visa/Mastercard duopoly and it will be
| governments that break it.
| gabll wrote:
| I agree, and I hope initiatives like the Digital Euro [0]
| will have success soon.
|
| [0] https://www.ecb.europa.eu/euro/digital_euro/html/index.
| en.ht...
| ta12653421 wrote:
| I do not think that it will fix these issues, but I
| gurantee you that in this present box some additional
| things will be brought to you ;-)
| Xss3 wrote:
| I'm hoping steam builds their own.
| lan321 wrote:
| They could probably make decent money with card graphics.
| I'd probably pay a couple bucks for a Gaben or an R6Siege
| card. Much more interesting than metal cards.
| WorldPeas wrote:
| Would not the best stakeholder to have on your side be
| companies like clover or toast, aside from ecommerce? I think
| the most concrete foothold one could have is brick-and-mortar
| POS acceptance, and now that places don't have to run their
| own registers this is probably easier than ever to push out
| to the masses.
| Nursie wrote:
| Pix seems to be working really well in Brazil.
|
| I'm adjacent to it in that we provide some of the
| infrastructure around identity etc in Brazil, and it seems to
| be really popular. I think there's a similar system in India.
|
| In the UK you can do payments via Open Banking. I'm not sure
| how popular it is, but I've used it a few times to send money
| to Wise to then send over to Australia.
| ceedaxp wrote:
| US consumers are too conservative in the way they expect payments
| to work--checks are still in circulation and "swipe & sign" has
| barely been put to rest (has it?). Any system like this would
| require adoption by a few diverse and large-scale retail
| institutions to make it worthwhile for consumers to use. Or else
| it would be a mere alternative to "PayPal me"...
| thayne wrote:
| It is very much a chicken and egg problem. Merchants have no
| reason to adopt it if there aren't very many customers that use
| it, and customers have no reason to adopt it unless there are a
| lot of merchants, or at least some important frequently used
| merchants that use it.
|
| I think for a new payment system to catch on it needs to either
| have a significant benefit for _both_ payers and merchants, or
| be pushed by government policy (for example, require all
| merchants that meet some criteria to accept the new form of
| payment).
| toast0 wrote:
| > It is very much a chicken and egg problem. Merchants have
| no reason to adopt it if there aren't very many customers
| that use it, and customers have no reason to adopt it unless
| there are a lot of merchants, or at least some important
| frequently used merchants that use it.
|
| I agree that both parties need a reason to adopt a new
| payment method... But the reason can't be only that there's a
| lot of merchants/customers that have it ... If there's
| benefits for enough participants, reach can drive adoption
| for those who don't care about the benefits, but you've got
| to have some material benefits to get people started.
|
| It's got to have a good experience, too.
|
| But from this rant, it seems like they were trying to be a
| middle man for instant bank payments... I don't see the value
| of that as a purchaser when I can use a debit card. For the
| merchant, running a debit card takes a small fee, but
| anything that needs someone to scan a QR code takes a lot of
| time.
| myflash13 wrote:
| One way to solve this problem is to have a certain commodity
| require the new payment method. If AWS for example created a
| new currency/payment method and made it the sole accepted way
| to pay for servers it could very quickly catch on as others
| adopt. Look how "Sign in with Google" became the default.
|
| I'm pretty sure the main reason Apple/Google/Microsoft
| haven't done this already is because they would be directly
| competing with the US government. The idea must get shut down
| pretty quickly by powerful people.
| Esophagus4 wrote:
| > The idea must get shut down pretty quickly by powerful
| people.
|
| There's no larger conspiracy here. It's that payments is a
| commodity now, with shrinking margins and high competition.
| It's not worth it for most players to even enter the space,
| let alone compete tooth and nail for a shrinking share of
| the pie.
| myflash13 wrote:
| No conspiracy? Is that why the US government also tries
| to prevent other countries like Brazil from
| internationalizing their payment systems like Pix?
|
| Apple/Google/Amazon/Microsoft could save billions on
| credit card processing fees by cutting out
| Visa/Mastercard -- but instead are pressured to accept
| "special rates" and warned to stay out of the business.
| Esophagus4 wrote:
| Show me where they're "warned to stay out of the
| business"
|
| Surely you must be thinking of mob movies, not the
| payments space.
| myflash13 wrote:
| There's evidence that Visa and Mastercard tried to
| prevent Apple from building their own network, including
| DOJ antitrust complaints in 2024 and a more recent suit
| in July 2025. The fact that antitrust allegations failed
| to make it in court despite it being such an obvious
| antitrust case against the duopoly very much suggests
| that there is something more going on behind the scenes.
| This seems like such an easy antitrust case to win,
| especially when it was used successfully in the Visa vs.
| Plaid case (another case where a potential competitor was
| prevented from building an alternative to
| Visa/Mastercard) - Plaid dropped their plans to build a
| network after their acquisition was cancelled.
|
| There's no way that I can take such strange goings-ons at
| face value - Apple only gains by disintermediating Visa
| and they clearly tried at some point, but something
| stopped them. What stopped them? Too hard for Apple? They
| already built the infrastructure for it with Apple Pay
| and Apple Cash. What stopped them from going all the way?
| I'm convinced something more powerful stopped them.
|
| See here:
| https://www.reuters.com/legal/transactional/apple-visa-
| maste...
|
| There is plenty evidence of shadowy forces shutting down
| payment systems, just look at Marc Andreessen's public
| statements about crypto founders he invested in getting
| debanked.
|
| https://medium.com/@nic__carter/marc-andreessen-and-the-
| cfpb...
| FabHK wrote:
| And other countries don't have chickens and eggs? They didn't
| use to pay for things in the past in those other
| jurisdictions that have adopted modern payment systems?
| anonzzzies wrote:
| US people feel absolutely fossils payment wise. Of course the
| US has the best marketing / pr but the state of payments is
| just depressing compared to even 'regulation blocked' eu.
| ameliaquining wrote:
| Two of the linked GitHub repositories don't have licenses.
| bruce511 wrote:
| When you start at the wrong premise, you typically end up in the
| wrong place.
|
| The premise is that credit cards (visa / Mastercard) is broken.
| When actually it works really well.
|
| For starters it works everywhere. Online. IRL. In my home
| country, in foreign lands.
|
| Secondly it costs the consumer nothing. The cost goes to the
| merchant. If anything the customer gets rewards.
|
| Merchants might pay 3%, (and ultimately yes, that's in the price
| of goods) but checkout "just works". They're in the "get paid"
| business, not the "teach customer new system" business. They'll
| _accept_ new payment options (which the POS) just provides. But
| they don 't drive the market.
|
| Fixing Visa doesn't work because the people that matter don't
| think it's broken.
| sneak wrote:
| > _Secondly it costs the consumer nothing. The cost goes to the
| merchant. If anything the customer gets rewards._
|
| Just like tariffs, right?
|
| Visa/MC is a +1% income tax on most of the economy.
| Tor3 wrote:
| It isn't - using cards, with fees, is cheaper than cash. I
| realized that when shops started to refuse cash (even if cash
| is legal tender and they, by law, _have_ to accept cash). The
| argument? Cash is too expensive.
| Imustaskforhelp wrote:
| how is cash too expensive?? huh?
| Tor3 wrote:
| _Handling_ cash is expensive. I never thought of that
| until my SO started working in a shop. To and from the
| bank, with stacks of coins and notes.. and there's
| presumably much more than that for larger firms. In
| general I rely my statement on what merchants themselves
| are saying. Newspapers are writing interviews with
| merchants who (illegally) have stopped accepting cash,
| even though it's legal tender. "It's too expensive. It
| reduces our bottom line." That kind of thing. When I look
| around I see "Cards only" a lot of places.
| ceejayoz wrote:
| > Newspapers are writing interviews with merchants who
| (illegally) have stopped accepting cash, even though it's
| legal tender.
|
| That's legal.
| https://www.federalreserve.gov/faqs/currency_12772.htm
|
| Legal tender applies only to debt/creditor relationships.
| Tor3 wrote:
| The USA is not all the world. The US rules don't apply in
| other countries. Rules differ. In many countries
| _businesses_ have to accept legal tender. Including in my
| own. That's why it's such a big deal when businesses
| actually still refuse cash.
| ceejayoz wrote:
| https://en.wikipedia.org/wiki/Legal_tender
|
| > Legal tender is a form of money that courts of law are
| required to recognize as satisfactory payment in court
| for any monetary debt.
|
| A country may _separately_ require businesses to accept
| legal tender, if they feel like it.
|
| https://en.wikipedia.org/wiki/Legal_tender#Status_by_coun
| try would appear to indicate this distinction is very
| common in the developed world.
| ubercow13 wrote:
| Of course cash is expensive, you have to handle it, count
| it, transport it. Haven't you ever seen those heavily
| armoured cash delivery vehicles? I mean just think how
| inefficient cash obviously is in every aspect of how it
| works compared to modern tech.
| SJC_Hacker wrote:
| Time spent totaling it, transporting it to from bank
|
| Having to buy a register / point of sale which can handle
| it
|
| Hoping you employees don't pocket a few bills here and
| there
|
| Hoping you don't get robbed
| Imustaskforhelp wrote:
| They only use cards because credit cards can allow them to
| get sales from people who wouldn't have been able to buy
| the product through debit itself, but they can buy it from
| credit.., so they are okay with eating 1-2% of costs in the
| fact that sale might happen and the companies will get
| 0.5-1% of it to you back as rewards (hopefully) and so
| there is incentive to buy using credit card for rewards but
| they might also give incentives of 1-2% if you buy through
| cash since they aren't eating that 1-2% cost.
|
| And this whole network has now been built in such a way
| that now even debit costs the same charge just as network
| fees
|
| Open sourcing this might be a step in good faith and I
| mean, we have UPI where I live and it has 0 fees and trust
| me its crazy good. I personally wish that either everybody
| in the world could use UPI or pixis from brazil.
| Tor3 wrote:
| The argument doesn't hold - if cards were only about
| getting sales which they otherwise wouldn't get - and the
| part about "getting sales which they otherwise wouldn't
| get", is true enough - then there's no reason to refuse
| cash payments. That's additional sales, right? But the
| fact is that more and more shops refuse cash payments
| entirely. "Pay by card or go somewhere else".
| Imustaskforhelp wrote:
| I can't comment on this fact of more and more shops
| refusing for cash payments entirely as I personally have
| NEVER seen that?
|
| Provide me an article or some proof to this fact for me
| to comment further as currently we are at an disagreement
| on this thing which I hope we can turn into meaningful
| discussion.
| Tor3 wrote:
| Well.. just a quick search (as I won't be talking a walk
| and photograph all the "cards only" signs I now see in so
| many places):
|
| https://www.theguardian.com/money/2025/mar/16/uk-high-
| street...
|
| https://www.dnb.nl/en/general-news/news-2023/some-retail-
| sec...
|
| https://www.bbc.com/news/articles/c20gevkx8gyo
|
| https://www.aarp.org/money/personal-finance/no-cash-
| accepted...
|
| https://educaloi.qc.ca/en/legal-news/do-you-have-the-
| right-t...
|
| https://www.riksbank.se/en-gb/payments--cash/payments-in-
| swe...
| Imustaskforhelp wrote:
| Well I appreciate the effort, might need to look a closer
| look since my country has UPI and its basically free
| transactions instantly and even then we are constantly
| warned by our older generation to always carry cash too
| as there are places that will still not accept UPI or you
| would need to go to shop, do upi payment, get cash etc.
| and I kinda agree, I have seen/heard of even many fights
| happening because UPI wasn't accepted.
|
| and that is when UPI is almost ubiquitous, I can't
| imagine a shop saying cards only. I think it might be
| illegal where I live.
| heavensteeth wrote:
| > even if cash is legal tender and they, by law, _have_ to
| accept cash
|
| this is not true as it is not what "legal tender" means.
| Legal tender is something that the _government_ must accept
| as payment, _not_ private enterprise.
|
| > Businesses don't have to accept cash.[0]
|
| > There is no federal statute mandating that a private
| business, a person, or an organization must accept currency
| or coins as payment for goods or services.[1]
|
| [0]: https://www.accc.gov.au/consumers/buying-products-and-
| servic...
|
| [1] https://www.federalreserve.gov/faqs/currency_12772.htm
| Tor3 wrote:
| That depends on the country. There are many countries
| (including my own) where any business must accept certain
| parts of the cash payment system (around here a taxi
| doesn't have to accept the highest-value bank note, but
| the rest cannot be refused). And shops, of course. That's
| why newspapers bother to write articles about it.
| SJC_Hacker wrote:
| They have to accept cash, huh?
|
| * Cash Payment Method Will No Longer Be Accepted A Notice
| by the Patent and Trademark Office on 10/03/2017*
|
| https://www.federalregister.gov/documents/2017/10/03/2017
| -21...
| wat10000 wrote:
| Note that legal tender does apply to private entities
| when it comes to paying debts, at least in the US.
| Creditors must accept legal tender, or give up claim to
| the debt.
|
| It's true that private businesses can set pretty much any
| payment terms they want for a transaction that hasn't yet
| taken place. But the moment you move to a situation where
| you owe money, they do have to accept cash.
| sneak wrote:
| They don't have to accept cash in advance. They do have
| to accept cash for debts, such as when you have already
| eaten the meal.
| ceejayoz wrote:
| That's an acceptable fee for the consumer protections I
| receive.
| sampullman wrote:
| If it's ultimately in the price of goods, then it doesn't cost
| the consumer nothing, no matter how you spin it. It's just
| cleverly hidden.
|
| I think it's close to impossible to "fix" Visa without
| government intervention (e.g. limit fees to a fraction of a
| percent), but I'm still grateful to anyone who tries.
| paranoidrobot wrote:
| > I think it's close to impossible to "fix" Visa without
| government intervention (e.g. limit fees to a fraction of a
| percent), but I'm still grateful to anyone who tries.
|
| This is what Australia is looking at currently:
| https://www.abc.net.au/news/2025-07-15/rba-credit-debit-
| merc...
| sampullman wrote:
| I'm interested to see if that works out, and curious what
| it means for international cards with lots of perks. I
| imagine, for example, it wouldn't change anything right
| away for a Chase Sapphire card issued in the US, but if
| more countries followed suit there would eventually be a
| tipping point and card benefits would be reduced.
|
| I guess the issuers all have complex models that take these
| things into account. In any case, I think it's a good move.
| itake wrote:
| The price is the same if you use cash or card. Really, after
| reward points, card tends to be even cheaper.
|
| Visa/Mastercard/BNPL/Klarna etc. all have negotiated
| discounts for consumers, paid for by the merchant.
|
| I'm skeptical that merchants would lower prices (stepping
| away from $x.98, etc) instead of pocketing the higher margins
| themselves.
| victorbjorklund wrote:
| if all customers choose to us cash the merchant could lower
| price with 3%. If you are the only one paying cash then yes
| the price will stay the same.
| itake wrote:
| Why would the merchant lower the price by 3% if consumers
| are willing to pay the current price?
| sampullman wrote:
| You're right that once prices have gone up, they rarely
| come back down. But if the price is the same, when you pay
| cash you're effectively subsidizing credit card reward
| programs, and lining Visa/Mastercard/issuer pockets.
| itake wrote:
| Same can be said about health insurance: private
| insurance negotiate lower prices than the non-insured due
| to collective bargaining.
| Tor3 wrote:
| The incentive for merchants to accept cards for payment is
| that it'll increase number of sales. And it does. In
| principle this should even out over all sales.. but cards do
| make it easier for consumers do purchase stuff, and I'm
| absolutely sure that I personally spend money way easier with
| a card than without (not that I spend more than I make,
| mind). The total number of sales go up.
|
| I haven't used cash in my home country for the last two
| decades, at least. I mean, CC works even on parking meters
| when paying half a dollar (equivalent) for a few minutes of
| parking, and I can use a card in flea markets and even some
| garage sales.
|
| Oh, I forgot: A lot of shops, restaurants, and other
| establishments have stopped accepting cash, even if it's
| illegal to do so (legal tender etc). That's because handling
| cash costs them MORE than handling credit/debit cards. In
| other words: It appears that using cards LOWER the costs for
| the merchant, not the other way around.
|
| EditAdd: I presume a lot of the cost saving is that paying by
| card is 100% electronic, just tap the card (add the pin code
| if it's expensive enough), and the transaction goes directly
| into the shop's account. With cash it's way more cumbersome.
| Way, way more.
|
| (Mind, there's no such thing as signing by hand anymore. If
| there were paperworks involved it would be different. But
| there aren't any, not in Europe and not in Japan anymore
| either)
| ceejayoz wrote:
| > A lot of shops, restaurants, and other establishments
| have stopped accepting cash, even if it's illegal to do so
| (legal tender etc).
|
| No. This is a misunderstanding of legal tender.
|
| https://www.federalreserve.gov/faqs/currency_12772.htm
|
| "There is no federal statute mandating that a private
| business, a person, or an organization must accept currency
| or coins as payment for goods or services. Private
| businesses are free to develop their own policies on
| whether to accept cash unless there is a state law that
| says otherwise."
|
| Legal tender only applies to debts. When you go to buy a
| t-shirt at Target or a burger at McDonalds, you don't owe a
| debt, and they aren't a creditor.
| SJC_Hacker wrote:
| > egal tender only applies to debts.
|
| I used to think that was true, but try paying parking
| fines, etc. with pennies. Legal tender has never been
| challenged in court to my knowledge
| dragonwriter wrote:
| > Legal tender has never been challenged in court to my
| knowledge
|
| It was challenged and upheld, both as against debts
| before the the legal tender acts were passed and those
| after, by the Supreme Court in _Knox v. Lee_ (1871).
| SJC_Hacker wrote:
| Yet the US government can refuse payments in cash
|
| https://www.federalregister.gov/documents/2017/10/03/2017
| -21...
| ceejayoz wrote:
| Yes. Because a patent filing fee is not a _debt_.
|
| (And because government can exempt itself from virtually
| anything not forbidden by the Constitution. This is why
| cops can break down your door, but I can't.)
| ceejayoz wrote:
| Parking fines aren't debts, and thus, legal tender
| doesn't apply.
|
| https://www.findlaw.com/legalblogs/seventh-circuit/city-
| sanc...
|
| > The Seventh Circuit Court of Appeals ruled this week
| that city-levied fines are not debts under the FDCPA...
| District courts, for what it's worth, uniformly agree
| that a fine does not stem from a consensual transaction,
| and thus is not a debt under the FDCPA.
| SJC_Hacker wrote:
| > a fine does not stem from a consensual transaction, and
| thus is not a debt under the FDCPA.
|
| Which transactions with the government is "consensual"
| where it doesn't demand payment up front (like a
| contractor)?
|
| This goes back to my idea that while legal tender is a
| nice idea, in practice it means nothing
| pbhjpbhj wrote:
| In the UK the definition of legal tender includes a limit
| on the use of small denominations.
| Tor3 wrote:
| As I wrote elsewhere: You're seeing this from inside the
| USA. USA is not the world. What's translated as "Legal
| tender" when wanting to write in English is just the
| closest term. That doesn't mean that your local
| definition of legal tender then applies. Cash, to be
| specific, _must_ be accepted as payment (with certain
| limited) exceptions, in my country. And still some places
| will refuse it. They even accept paying fines now and
| then because of it.
| camillomiller wrote:
| One thing to consider: cards solve the issue of employees
| stealing, which is surprisingly common from what I've heard
| especially in businesses with high workers turnover, such
| as seasonal bars and restaurants.
| fragmede wrote:
| They also solve the problem of someone coming into the
| store with a gun and robbing the place for the cash in
| the register. And for the government, they solve the
| problem of stores not paying sales tax.
| rprend wrote:
| > The incentive for merchants to accept cards for payment
| is that it'll increase number of sales this is something
| that ive thought about a lot, because while it is strictly
| true in the short run it may not be in the long run. For
| example, i don't have any debt, but i use a credit card for
| everything. Why? It's become my default to use it.
|
| I wonder if the same thing will happen with BNPL (Klarna,
| Afterpay). These are higher fee than credit cards (5-7%)
| because they bring in new customers. But, like with credit
| cards, savvy customers are starting to see BNPL as interest
| free loans (aka free money on the float, even better than
| credit card rewards), and it's possible that they become
| the new consumer results. Merchants are left holding the
| bag of paying 6% processing fees for everyone, even people
| who can afford it.
| vasco wrote:
| > Secondly it costs the consumer nothing. The cost goes to the
| merchant. If anything the customer gets rewards.
|
| Sellers increase the price by the fee amount, savvy consumers
| with rewards cards can get back around 80% of that price
| increase, and regular non-credit-card-with-rewards holding
| consumers just subsidize the whole thing by paying the extra.
| It's a tax on people without rewards cards.
| memco wrote:
| Not sure how prevalent this is now, but a few years back I
| was seeing a lot of "cash price" advertised for stuff that
| was lower by whatever the merchant didn't have to pay in fees
| so sometimes cash may not be subsidizing the credit industry.
| ameliaquining wrote:
| In a lot of cases there are regulatory or contractual
| barriers to doing that.
| conductr wrote:
| The card issuers used to prohibit it, not been the case
| in a while though. They used to prohibit having a minimum
| transaction amount or charging transaction fees to your
| customer too. It never stopped small merchants though
| lotsofpulp wrote:
| In the US, not since 2011 since the Dodd Frank act
| required payment card networks to allow merchants to
| offer cash and debit card discounts.
|
| https://www.ftc.gov/business-guidance/resources/new-
| rules-el...
| ameliaquining wrote:
| There's no longer a blanket ban, but there are still
| obstacles:
|
| * Mastercard and Visa don't allow debit card surcharges,
| even if the transaction is run as "credit".
|
| * American Express only allows surcharges if they also
| apply to all other forms of card payment. This includes
| debit cards, which interacts problematically with the
| previous rule; if you want to do a card surcharge while
| accepting all three card brands and remaining compliant
| with all their rules, you have to apply it only to
| Mastercard and Visa and not American Express, even though
| American Express is the most expensive.
|
| * Several states still don't allow card surcharges, and
| others don't allow merchants to profit from surcharging
| (which makes it hard to advertise a uniform surcharge) or
| have regulations about how prices have to be listed if a
| surcharge is going to apply.
|
| Rules like these don't make it impossible to do
| surcharges while remaining compliant, but they make it
| significantly harder than it'd otherwise be. I think this
| is the primary reason why most merchants still don't do
| them. (Well, that and that their competitors don't, but
| that could explain either equilibrium.)
| lotsofpulp wrote:
| A cash and debit card discount is the same as a credit
| card surcharge, I fail to see how this qualifies as
| "significantly harder".
|
| Target, one of the largest retailers, offers a 5%
| discount for debit. Comcast, Tmobile, Verizon, ATT,
| Lumen, utilities, governments, and insurance companies
| also routinely charge extra for credit cards (or
| discounts for debit/cash).
|
| Daycares charge more for credit card, as do doctors'
| offices.
|
| At least half the gas stations I see have long had higher
| credit cards prices.
|
| Not to mention contractors for physical labor.
|
| The change since 15 years ago is stark. If I wasn't
| getting a minimum of 3.5% cash back on my purchases, I
| would use credit cards a lot less.
| ameliaquining wrote:
| Huh, I didn't know that about Target (perhaps because
| I've lived for years in a state that doesn't allow this,
| so I can't get the discount where I live).
|
| I did know that recurring utility-type payments, and
| payments of more than a couple thousand dollars, tend not
| to accept credit cards or to charge a lot extra for them,
| presumably because it's not as costly for them to make
| their users eat the inconvenience of setting up ACH
| payments. Most merchants can't get away with that. I've
| also seen it for gasoline but chalked this up to gasoline
| being an unusually fungible and high-demand commodity.
|
| Do you know how they're handling the American Express
| problem? I don't _think_ I 've noticed a big contraction
| in how many merchants accept it.
| lotsofpulp wrote:
| > Huh, I didn't know that about Target (perhaps because
| I've lived for years in a state that doesn't allow this,
| so I can't get the discount where I live)
|
| I linked to a website that shows the federal government
| specifically allowing it. You can definitely get a 5%
| discount in your states' Targets for paying with a debit
| card:
|
| https://www.target.com/circlecard
|
| > Do you know how they're handling the American Express
| problem? I don't think I've noticed a big contraction in
| how many merchants accept it.
|
| It's not a problem. Refer back to the federal legislation
| that prohibits payment card networks from dictating cash
| and debit card discounts.
| ameliaquining wrote:
| Oh, this is a _specific co-branded_ card, that 's a
| different thing and one I've seen a bunch of places.
|
| It seems pretty uncontroversial on the internet that
| American Express has this policy, and I can't find anyone
| alleging that Dodd-Frank prohibits it. There _is_ a class
| action lawsuit against American Express alleging that the
| policy is illegal (https://fingfx.thomsonreuters.com/gfx/
| legaldocs/zdvxngqeovx/...), but it makes its argument on
| antitrust grounds and does not cite Dodd-Frank--which it
| would surely do if there were a plausible argument that
| Dodd-Frank prohibits this. I don't know exactly how this
| squares with the text of the FTC's business-guidance
| page, but that page is a concise summary and doesn't get
| into all the details of the law, so my guess is that the
| situations it applies to are somehow different from what
| American Express is doing.
| lotsofpulp wrote:
| It's not really a co branded card. They send you a Target
| Redcard you can ignore, but all it does is charge your
| debit card as usual. There is no credit check.
|
| Your Amex lawsuit link is about Amex prohibiting
| different discounts based on payment card networks (see
| #4 at bottom of page 2).
|
| Amex's contract does not overrule the federal
| government's rule that a merchant can offer a discount
| for debit and cash.
|
| The Supreme Court upheld AmEx's steering provisions in
| 2018.
|
| https://en.wikipedia.org/wiki/Ohio_v._American_Express_Co
| .
| ameliaquining wrote:
| Page 10: "Under Amex's NDPs, the merchant...may not
| impose a 'parity surcharge' on credit card transactions,
| meaning a surcharge in which the merchant assesses the
| same surcharge amount on all credit card brands and does
| not surcharge debit cards at all."
| lotsofpulp wrote:
| That page is getting into the weeds, but none of that
| says a merchant cannot state that cash and debit cards
| receive an x% or $x discount.
|
| The federal regulations specifically allow discounts, and
| presumably some lawyers will argue that a surcharge is
| different from a discount.
|
| Amex is trying to do all it can, but still can't tell a
| merchant they cannot advertise a discount for cash/debit.
| vidarh wrote:
| Handling cash costs money too. Sometimes more than handling
| cards. But a proportion of customers who like cash are very
| strongly convinced they are "subsidising" card payments,
| and might be attracted by pricing like that, so maybe it
| still ends up being a net gain.
| ta12653421 wrote:
| From a percentage perspectice, handling huge amounts of
| cash should be far more expensive; I know one of the
| operators over here in my country: If you are a
| supermarket chain and have three locations in one large
| street, they charge you for every stop a minimum fee +
| additional handling costs.
| didibus wrote:
| Are you saying that even when I pay for something in cash or
| using debit, because of the possibility I'd use my credit-
| card the merchant had +3% their price?
| vasco wrote:
| Almost but not exactly, any rational merchant would
| estimate how much they pay monthly in credit card fees and
| find a way to add that back to their revenue. For most
| practical cases, the business is started already after the
| existence of credit cards, so when modeling revenue in your
| business plan this should already be baked in and the
| prices you come up with already cover it.
|
| So it doesn't mean they increase the price of every product
| by 3%. One guy might charge more just for coffee, another
| do some other thing. But any extra cost you put on a seller
| of anything, the rational seller will make that back in
| sales somehow.
| mightypirate wrote:
| the seller just charges whatever it get can get away
| with. 3% only has an impact when margins are closer to
| that percentage
| conductr wrote:
| Savvy/corporate sellers are typically concerned with
| margins so fees do play a role
| AnthonyMouse wrote:
| In particular, that is what happens when costs are
| imposed industry wide, as with credit card fees.
|
| If the cost is only being paid by one vendor then that
| vendor can't raise prices or else customers would
| patronize one that had lower costs and passed on the
| savings. But if _every_ vendor has to pay 3% then prices
| are going up 3%, because then the competition has no cost
| advantage they can pass on and people only stay in
| business if they 're making enough to justify not doing
| something else. (3% is more than the entire net margin in
| many industries.)
| vidarh wrote:
| A rational merchant would know that they are also
| incurring costs for handling cash, and depending on the
| size of the business that cost can in fact be _higher_
| than the cost of handling cards.
|
| In fact, the low end of cash handling costs for a
| business will almost always be higher than the card fees
| alone, but of course there are other costs in managing
| card payments too, so it's not quite that clear cut.
| eszed wrote:
| Cash handling isn't free! You have to pay someone's time to
| count + reconcile + deposit it, or If you're dealing at any
| volume, you'll pay an armored car service to collect it.
| There's inevitably "shrinkage", or else business processes
| (more time and more overhead) to avoid it.
|
| Cash _is_ king for hiding transactions and avoiding taxes.
| If that 's the situation then I won't say you don't deserve
| a cut, but for rules-following merchants taking cash isn't
| any cheaper than paying the credit card fees.
| jader201 wrote:
| > _but for rules-following merchants taking cash isn 't
| any cheaper than paying the credit card fees._
|
| That's not true at all, particularly for large purchases.
|
| If I go to an electronics and check out with $5000 in
| electronics, there's no way that handling cash incurs the
| same expense to the store as the 3% fee ($150).
|
| Maybe for nickel and dime purchases, but that's rarely
| the case.
|
| Even a $50 dinner doesn't cost the restaurant $1.50 (plus
| the $0.30 transaction fee) just to handle cash.
| ceejayoz wrote:
| You're not factoring in "I won't go somewhere that
| doesn't take a credit card".
|
| A store that sells $5k electronics is gonna lose a lot of
| sales if they attempt to save that $150 by only taking
| cash.
| AnthonyMouse wrote:
| Which is why you take both but make the credit card
| customer eat the fees. Then many customers will save you
| (i.e. themselves) the money by paying cash and the ones
| that insist on using a credit card are free to pay what
| it actually costs.
| amanaplanacanal wrote:
| Why do I almost never see a cash discount like this in
| practice? An I shopping in the wrong places? Or does
| something else prevent it?
| ceejayoz wrote:
| In NY, I see it most frequently at gas stations.
| eldaisfish wrote:
| Because that's your subjective experience?
|
| Canada has lots of stores that offer a discount if you
| pay cash. Many have a minimum purchase amount for credit
| cards.
| AnthonyMouse wrote:
| The credit card companies hate it for the obvious reason
| and then the traditional reason was they would impose
| contractual requirements or get laws passed to prevent
| companies from offering a cash discount. People have
| posted here saying this has been reversed by federal
| rules, but then you're still left with two reasons.
|
| One, inertia. Companies haven't realized they're allowed
| to do it now. That'll change over time.
|
| Two, there are ways to transfer "cash" digitally without
| paying the credit card fees (i.e. ACH), and there _are_
| reasons to want to use digital payments -- making
| payments over the internet being a major one -- but ACH
| is ancient and it needs some kind of modern open standard
| in order to do things like make a payment request and
| determine in real-time whether the source account
| actually exists and has sufficient balance to make the
| payment. Various attempts to do that are constantly being
| made and constantly being fought against by Visa et al.
| XorNot wrote:
| This is a huge pile of uncosted assumptions.
|
| If you take cash it means you have to hold it on site. To
| be insured you have to demonstrate secure handling for
| the insurer, which would include security systems and
| limiting the amount in the safe and register. Which means
| routine trips to the bank, which also incurs costs.
|
| Like...that could all be true, but the rate merchants
| tried to ditch ever handling physical money rather
| suggests the fees were worth it (not to mention all the
| risk mitigation doesn't cover the increased danger to
| ones personal safety - walking $5000 to the bank is no
| fun at all).
| blitzar wrote:
| Business banking != consumer banking. The bank will
| charge ~$0.10-$0.50 for that $50 deposit + the wages of
| the person who goes to the bank to pay it in (minimum
| $7.25 per hour).
| vidarh wrote:
| Average cash handling cost is typically estimated in the
| range of 4%-15%. You're right that there might be
| individual differences in what it would cost to handle a
| single transaction, but a store isn't in a position to
| pick and choose - they handle an aggregate. If your
| electronics store _only_ handles large transactions,
| maybe their percentage would be lower, but that 's
| extremely rare. And even so, handling large cash amounts
| comes with its own costs around security.
| JumpCrisscross wrote:
| > _Average cash handling cost is typically estimated in
| the range of 4%-15%_
|
| I think the assumption is they declare only a portion of
| their cash receipts.
| vidarh wrote:
| I think that is commonly the reason why some businesses
| do offer discounts, but note the person above replied to
| "but for rules-following merchants taking cash isn't any
| cheaper than paying the credit card fees" which seems to
| have specifically anticipated exactly that.
| scotty79 wrote:
| Handling cash is obviously cheaper in Germany because
| merchants discourage customers from using their credit
| cards every time they can.
| frontfor wrote:
| Still, most consumers don't care or notice it (we are not
| most consumers), so this doesn't refute the original
| argument.
| vasco wrote:
| If I take your money without you noticing it won't affect
| your immediate behavior, but later on you'll buy less
| stuff, specially if I keep doing it. If nothing else
| because you don't have it anymore.
| conductr wrote:
| It's worse on business cards. I negotiated a bank contract
| for our corporate card program earlier this year and we get
| 3.5% cash back from purchases. It incentivizes us to pay
| every vendor invoice by card too as ACH / check actually cost
| us money.
| vidarh wrote:
| Handling cash costs more on average at least for smaller
| businesses than typical card fees.
|
| It's typical to estimate the cost of handling cash anywhere
| from 4% to as high as 15% depending on takings and size of
| transactions.
| Hunpeter wrote:
| As someone with little financial knowledge, I'm curious why
| that is the case and how those estimates are calculated.
| I've seen stores offering a discount on cash payments,
| citing card-related fees as the reason.
| aledue wrote:
| Here in Italy the answer would be that you cannot evade
| taxes if payments are tracked. I imagine that applies
| elsewhere too.
| ceejayoz wrote:
| Cash can be misplaced. Stolen. Needs to be stored
| securely. Banks often charge fees for depositing large
| amounts. Security companies charge fees to transport said
| amounts. Counterfeit bills. Etc.
| stellar678 wrote:
| I kinda wondered about this forever as well. Then one day
| I was chilling in my local worker-owned cooperative
| bakery when the Brinks truck came by to do the bakery's
| cash pickup. Armed driver. Guard waiting next to the
| truck holding a long gun. Two guys (presumably armed)
| going into the business to get the cash and take it out
| to the truck. That's all pretty expensive!
|
| Smaller family-owned businesses will just take cash to
| the bank - but it's super common for somebody to
| eventually surveil them long enough to rob them one day
| as they're transporting the cash to the bank.
|
| It's pricey to handle cash!
| pbhjpbhj wrote:
| Discount on cash IME is because they're not putting
| transactions through the till (POS) so they can commit
| [tax] fraud.
|
| Ran a micro business in UK for 15 years, cash cost as
| much to deposit as card did - employee time (counting,
| reconciling, making deposit) and bank charges for cash
| deposits. It also slowed down transaction time (which was
| almost all IRL).
| vidarh wrote:
| Fraud done by shop owners is one reason why they might
| still offer a discount, but also a lot of the time I
| simply think stores don't actually realise how much it is
| costing them.
|
| E.g. they might not include staff time and incidental
| costs around cash transactions that aren't obvious
| because they're not linked to the individual
| transactions, such as reconciliation, time spent
| transporting the cash, costs of depositing the cash,
| insurance to cover storage of cash.
|
| Also consider that it takes very little theft to tilt the
| balance, and even a tiny amount of theft by cashiers not
| putting through all cash transactions can make a big
| difference.
| ac29 wrote:
| > they might not include staff time and incidental costs
| around cash transactions that aren't obvious because
| they're not linked to the individual transactions, such
| as reconciliation, time spent transporting the cash,
| costs of depositing the cash, insurance to cover storage
| of cash.
|
| Yep. I worked as a supervisor in retail for a number of
| years and here's a list of cash handling costs that dont
| exist with card payments:
|
| Making change on each transaction
|
| Counting cash drawers in and out for each employee shift
|
| Preparing daily bank deposits
|
| Going to the bank to make deposits and get new change
|
| Theft (by employees, external theft wasnt a problem for
| us)
| rendaw wrote:
| And some businesses (that consumers want) just don't exist
| because they can't be made to fit the card pricing structure.
| Ex: journalism (subscriptions only)
| chrismcb wrote:
| It costs the consumers. Sometimes indirectly and sometimes
| directly. I would think that this is the primary motivation to
| come up with a new scheme.
| astrange wrote:
| Credit cards are a huge benefit to customers because of
| purchase protection, chargebacks, and being able to spend
| money before you earn it that month. The merchants pay the
| fees because it gets them sales they wouldn't otherwise get.
| frontfor wrote:
| It might be one motivation, doesn't mean it's a good one as
| per the original comment if consumers don't care.
| albiinics wrote:
| This is like says the tarrifs are paid by the other countries,
| not the US citizens.
|
| In reality, there is no competition in the payment systems.
| Free markets mean competition.
| blitzar wrote:
| All business costs are either paid for by the VCs or the
| customer. Even the VCs end up getting paid by the customers
| in the end.
| toast0 wrote:
| There might not be _robust_ competition between payment
| systems, but when I go to a store, I 've got options to pay:
|
| Cash, credit (discover is dieing, but amex/mc/visa compete a
| bit), debit (several networks and all US cards have to be on
| at least two), I've seen PayPal as an option ocassionally,
| some merchants take Zelle, FedNow could if a good UX comes
| around (I don't think many merchants want to give out their
| routing and account numbers, and it's tedious to input them
| into my banking app anyway). Some vendors take checks and
| deposit them later, some take checks and process them
| immediately, etc.
|
| People respond to incentives though. If merchants charge the
| same regardless of payment method, I'm going to use a rewards
| card that costs them more. When they add a line item credit
| charge, I'll consider cash or debit.
| randallsquared wrote:
| I would be very surprised if Discover is dying. The whole
| point of Capital One buying them--well, a major point--was
| to have an alternative to MC/Visa on which they can run
| debit and credit cards, and so they'll be pushing an
| expansion of the Discover network rails pretty hard, I'd
| expect.
| nottorp wrote:
| > For starters it works everywhere. Online. IRL. In my home
| country, in foreign lands.
|
| Only if Visa/MC agree with the item being sold though.
|
| Be careful to not get hobbies that some religious pressure
| group hates. Today sex, maybe tomorrow rock climbing or fixing
| your own motorcycle.
| camillomiller wrote:
| OP wasn't defending VISA policies, they were just
| realistically describing how taking on CC circuits with this
| premise is a risky approach that tries to fix a problem
| potential customers don't have. What you are saying is in a
| completely different domain. Personally I think you're right,
| but the only way to solve that is regulating the payment
| giants as a public utility, not picking a fight against a
| business model that is a lot of things, but not broken.
| fsflover wrote:
| A business mode that relies on duopoly _is_ broken and must
| be regulated.
| camillomiller wrote:
| I literally said it must be regulated. Depends what you
| mean by broken: for the business owners it's not broken.
| For the users? Sure, but they are not stakeholders in the
| business. They are stakeholders in the society that an
| excessively successful business model is affecting
| negatively, hence: regulation.
| fsflover wrote:
| So we agree.
| nojs wrote:
| > For starters it works everywhere. Online. IRL. In my home
| country, in foreign lands.
|
| Haha, if only that were true. I'd say roughly 20% of my
| purchases are rejected because of a badly tuned fraud algorithm
| somewhere.
| ForHackernews wrote:
| Counterpoint: Loads of merchants refuse to accept American
| Express because the fees are higher. Some merchants have gone
| to court for the right to offer lower "cash prices" - something
| Visa/Mastercard oppose because they want those fees hidden.
|
| Clearly, at least some merchants are price-sensitive and would
| be interested in a lower-fee alternative to Visa/MC.
| amanaplanacanal wrote:
| It sounds like all merchants in the US have been able to
| offer lower cash prices for over 10 years now. I rarely see
| it though.
| pbhjpbhj wrote:
| So a 1980s computer is faster at calculating than a person, so
| why reduce the cost? Or a car is cheaper to maintain than a
| horse, why reduce the cost?
|
| Let's flip the script. In reality the averaged transaction
| _cost_ is probably O(0.1%) or lower. Why are we paying more?
| Ekaros wrote:
| Decision makers and regulators have been bribed in many
| places.
|
| EU has actually solved this with interchange fees for
| consumers being 0.3% which to me sound reasonably close to
| that 0.1%.
| viraptor wrote:
| Sounds like one place where it's broken is the morality
| policing. If tech can succeed due to usage in porn, maybe
| Zenobia can too? Then move to services like onlyfans, then try
| all the other creators who also have problems with fees (like
| the revolt when patreon tried to raise them)?
| scotty79 wrote:
| > Secondly it costs the consumer nothing. The cost goes to the
| merchant. If anything the customer gets rewards.
|
| Ultimately customer pays for everything. Credit card companies
| just prevent merchants from revealing the costs of using credit
| cards to customers. Which should be illegal.
|
| > Fixing Visa doesn't work because the people that matter don't
| think it's broken.
|
| People don't know it's broken because regulator doesn't do
| their job and lets credit companies police merchants.
| worthless-trash wrote:
| > Secondly it costs the consumer nothing.
|
| I can assure you in Australia, this is -clearly- not true,
| vendors pass the cost on to the consumer. I can probably choose
| a random store and prove this.
|
| > The cost goes to the merchant.
|
| And who do you think would pay the merchants costs in this case
| ?
| rprend wrote:
| Yep you get it Bruce. Unfortunately I confused being a villain
| (everybody likes to bash visa) with being bad at their jobs and
| disrupt-able.
| poopsmithe wrote:
| [flagged]
| OsrsNeedsf2P wrote:
| After a laggy scroll led to me being flash-banged and closing
| the tab, I couldn't agree more.
| poopsmithe wrote:
| I'm calling it-- 5 years and this will be vaporware. We live in a
| world where you have to 1) compete with VISA, Mastercard and 2)
| compete with Bitcoin Lightning Network.
| OutOfHere wrote:
| It helps to get clued into what happened with stablecoin
| legalization and interest this year. Without this awareness one
| risks looking very foolish.
| OsrsNeedsf2P wrote:
| I was an early adopter of the Bitcoin Lightning Network. If my
| memory serves correctly, I made one (real) payment with it.
| That was almost 10 years ago now, and I haven't even seen the
| chance to use it since.
| littlecranky67 wrote:
| Mostly because it is still innovated upon. Async payments
| (offline receival) and trampoline payments are in the
| pipeline, allowing true self-custodial wallets on the
| smartphone.
|
| That aside, I only use lightning with my Bitcoin-friends to
| settle stuff for fun. I live in a city of 300k people, and
| there are 3 restaurants that accept Lightning payments. Right
| now it is in its infancy, but I see Lightning as the only
| solution to actually enable web micro-payments (which failed
| as a standard because no credit card can provide .10 to .20
| cent payments due to high fees)
| godelski wrote:
| Considering they are closing shop, I don't think you need to
| wait 5 years. Did you even read the article? They say it in the
| opening of the second paragraph...
| sokoloff wrote:
| I would bet more transactions are done in exchange for literal
| home-grown vegetables this month than over Bitcoin Lightning
| Network, yet no one claims a payment method needs to compete
| with bartered vegetables.
| dewey wrote:
| You don't have to wait that long, they shut down. "We realized
| that we were back at square one, and with our product so far
| ahead of our sales, decided to pivot away from payments
| entirely."
|
| https://zenobiapay.com/blog/open-source-payments
| protocolture wrote:
| This sounds like a post mortem disguised as marketing material.
| OsrsNeedsf2P wrote:
| This is what product market fit looks like; everyone is trashing
| various pieces of Zenobia, but it's still getting upvoted because
| we all want the solution.
| Copenjin wrote:
| A solution to what? Serious question, I don't have any issue
| with the current model. Or are you referring to recent events?
| kennywinker wrote:
| The problem of paying 1-3% of every purchase to credit card
| companies, causing everything to cost 1-3% more.
| amanaplanacanal wrote:
| Are merchants going to charge different prices depending on
| your payment method? Or stop taking visa/MasterCard
| entirely? I don't see either one of those happening.
| kennywinker wrote:
| So, you don't believe that a non-governmental tax on
| every transaction causes prices to rise? Because you'd be
| in disagreement with probably every economist ever.
|
| Or are you just saying change is impossible so why
| bother?
| orthecreedence wrote:
| > Are merchants going to charge different prices
| depending on your payment method?
|
| They are barred from doing so by credit card companies.
| That's why many smaller shops have "cash preferred"
| signs.
| scotty79 wrote:
| To duopoly exploiting customers? Europe knocked down transfer
| fees to 0.2% for debit cards and 0.3% for credit card. All
| fees for the merchant sum up to something around 1%. So
| anything on top of that, that Visa customers pay in US is
| pure exploitation. And US government isn't doing anything so
| people see alternate solutions for this problem.
| federiconafria wrote:
| Apparently not everyone:
| https://www.reddit.com/r/CreditCards/comments/1hxiusj/europe...
| haritha-j wrote:
| Living in the UK, I didn't realise rewards were such a big
| deal in the US. I'm shocked at the resistance though, to me,,
| its a no brainer to just be charged less in the first place
| rather than have to keep track of some silly reward system to
| get back the extra money that they charged me. It's the same
| reason I prefer Aldi to all the other supermarkets, that make
| me keep track of some silly reward scheme, plus use my data
| to sell me more stuff to boot.
| OkayPhysicist wrote:
| Credit card rewards programs are "eh", but for me I'd be
| worried about being forced into a low-trust system like
| Europe has. In the states, I don't have to worry, at all,
| about someone using my credit card for nefarious purposes.
| Getting any such fraudulent activity purged from my card is
| as easy as flagging it in my banking app.
|
| This leads to a number of positive outcomes, such as not
| worrying at all about sketchy or online purchases, and
| "American style" payment at restaurants (where we just toss
| our card on the receipt, and eventually it gets picked up,
| processed, and returned without further interruption).
| rprend wrote:
| it's a super dangerous tarpit, because it has what id call
| theoretical product market fit: when you describe it to people,
| they're super excited by it. Everybody says that they want it
| and they encourage you along the way. But when it comes down to
| it, nobody wants the solution
| nima999 wrote:
| I totally disagree with "We proposed merchants "split the
| difference" in fee savings with their customer, giving customers
| ~1% in at-checkout "cashback". But this is just a worse version
| of credit card rewards."
|
| As a shopper, if I know that a SMB is saving 1% or even 2% on
| merchant fees, I would gladly choose that option, even if I miss
| out on rewards for that purchase.
| nottorp wrote:
| The thing is, Visa and MC are doing just fine(tm) on countries
| where their cut is limited by law to less than 1%. Everything
| else is just pure profit, no matter who runs it.
| blitzar wrote:
| > cheaper payments ... Zenobia Pay charges 1%.
|
| 5x higher than they would be allowed to charge in the EU.
|
| > accept pay-by-bank
|
| I am reminded of tech bros inventing the bus in 2025
| scotty79 wrote:
| They make sense on US market but I had a chuckle when they
| mentioned European brands giving them cold shoulder. This
| problem is solved in Europe through legislative action.
| rprend wrote:
| Where do you get 5X? European interchange is regulated to
| .3-.4%, the network fees are the same as the US (.1-.2%) and
| then the payment service provider takes their fee. Online card
| processing in the EU costs around 1%.
| jatins wrote:
| the home page says "ZENOBIA PAY IS NO LONGER ACTIVE"
|
| so this is a farewell post disguised as open source announcement?
| kennywinker wrote:
| It's both? Giving up and opening the code up. Most companies
| should do this. Why throw away all that work and effort if it
| could be useful to someone else.
| netcrash wrote:
| The modified scrolling on the website is the worst!
| nielsbot wrote:
| custom scrolling: not even once
| messe wrote:
| Why do designers do this?
| blain wrote:
| I usually agree with the sentiment but for some reason this
| implementation is so smooth on my old laptop I like it.
| zachrip wrote:
| trackpad?
| voidUpdate wrote:
| Unless I'm on a touchscreen device, I never want my scrolling
| to have inertia. So just leave it on the default behaviour. I
| don't understand why you would put in the effort to make the
| scrolling feel worse
| bklw wrote:
| The fees are for fraud prevention and sanctions compliance. That
| stuff costs real money.
| kennywinker wrote:
| Maybe. But the 39 billion in profits visa made last year
| suggests they make a fair bit more than that stuff costs.
| JumpCrisscross wrote:
| > _fees are for fraud prevention and sanctions compliance_
|
| Visa and Mastercard's pre-tax income margins for the quarter
| ending on 30 June were 62% and 57% respectively [1][2]. That is
| $10bn a quarter in absent competition.
|
| [1] https://finance.yahoo.com/quote/V/financials/ _$6.33 on
| 10.2bn_
|
| [2] https://finance.yahoo.com/quote/MA/financials/ _4.67 on
| 8.13bn_
| godelski wrote:
| What the fuck is with the comments here? Guys, it is a
| postmortem. So you all are complaining about the scrolling and
| accusing it of being advertising or an announcement?
|
| Frankly, I find this admirable and want to encourage these kinds
| of things. Guys gave it a shot, failed, and are putting their
| work out there. They are communicating why they think they failed
| and what they think would help someone pick up the mantel. What
| did you all want? Them to just die in quiet and all that code
| disappear? Hell, their READMEs have more documentation than most
| of the open source projects out there.
|
| What happened to that hacker mentality? That belief in an open
| source world, even if as just a pipe dream. To me it looks like
| they still care about their dream but realized _they_ can 't make
| it happen. They aren't asking for investment and their website
| says they are inactive, so what makes this advertising? FFS do we
| have to assume everything is done in bad faith? You don't
| advertise by giving your competition a leg up. If this gets them
| investment, who cares, the result is the same. Code and
| information is out there, you can't take that back. Honestly, I
| don't care even if the code was garbage (I don't know if it is or
| isn't), I'll respect anyone that releases their code instead of
| letting it die with the business. It's just a better outcome, so
| why are you all complaining?
| thunfischtoast wrote:
| Interesting read. I'd suggest next time choosing a name that does
| not sound close to Xenophobia :) anyway, good luck on your
| further journey
| alsetmusic wrote:
| This was my first thought as well. It reads like a dog-whistle
| at first glance.
| Charon77 wrote:
| But they're no longer active as mentioned on site
|
| https://zenobiapay.com/blog/open-source-payments
| ninalanyon wrote:
| In Norway there is already a low fee processor called BankAxept.
| It has made it practical for shops to sell even the cheapest item
| and accept payment by card without losing money.
|
| https://en.wikipedia.org/wiki/BankAxept
| laurencerowe wrote:
| This seems to have happened in the UK now too, though all bank
| debit cards have been Visa Debit since 2009 or so. I think fees
| are now solely percentage based and close enough to bank cash
| handling fees that there's no longer any downside to accepting
| card payments for small transactions.
| albertdessaint wrote:
| Interesting read, I searched if another startup got this market
| right, it seems truelayer did using open banking for online
| payment ($700m valuation) https://truelayer.com/
| myflash13 wrote:
| Many countries in Europe have pay-by-bank solutions that work
| really well.
| hexo wrote:
| That scrolling. No way.
| kalev wrote:
| Are these live private keys?
|
| https://github.com/zenobia-pay/core/blob/6b79cc494d3f14e4ddf...
| fhars wrote:
| These probably were live keys before they shuttered the
| project, see https://news.ycombinator.com/item?id=44898330
| rprend wrote:
| oops
| olliem36 wrote:
| Cofounder of Lopay here - we have the same mission: offer free
| payments to businesses, but we're working with existing networks
| to do this.
|
| QR code payments are particularly hard in countries like US and
| UK as you're trying to change consumer behaviour. I tried doing
| this in 2014 and again in 2019 - both failed to gain traction
| (aside from during COVID).
|
| In the UK it's possible to accept card payments for 0% via Lopay,
| but only if you spend your earnings on our card (essentially,
| passing the fees onto the merchant/supplier you're paying). We're
| launching the same proposition in the US soon too.
|
| If you don't use our card, our headline rate is 0.79%.
|
| We're a lean team of just 36, supporting over 40k weekly
| transacting businesses with PS1B+ in card processing. If anyone
| reading this is interested in this space, we're hiring and on the
| look out for driven people to join us!
| panja wrote:
| Just curious, why is there an extra per transaction charge for
| tap to pay? Is there more that goes into that?
| wat10000 wrote:
| QR codes feel like such a step backwards compared to NFC. The
| UX with current mobile OSes is not good. And if you require an
| app, or even worse an active data connection, well, I much
| prefer a quick double-click of my phone's side button and then
| putting it near the payment terminal. And I'm really skeptical
| about security. NFC is vulnerable to relay attacks and QR codes
| can be secured by using one-time codes or rolling time-based
| codes, but showing a bright high contrast "scan this to take my
| money" image in public feels very wrong.
| lan321 wrote:
| I couldn't get a wallet app to work with GrapheneOS, so for
| me, QR codes are better, but they feel like they have
| different use cases. I like QR codes in mail invoices (very
| common in CH), I'd like NFC in a shop if I could use it.
| gunalx wrote:
| Im im the same boat. Luckily in ny case a local banking app
| has their own NFC card Funktion witch works flawlessly.
|
| But no tap to pay would for me have been one of the
| greatest downsides with graphene os.
| deno wrote:
| Tap to pay sometimes works if the banking app has its own
| implementation instead of relying on Google Pay. There's
| a list[1].
|
| [1] https://privsec.dev/posts/android/banking-
| applications-compa...
| kevincox wrote:
| This is a policy problem not a technology problem. If QR
| code solutions mandated the same policy they would have the
| same limitation.
| lan321 wrote:
| That was my disclaimer, but I do prefer, regardless of
| what works on GrapheneOS, having a QR in my invoice
| letters. You could shine a light on the envelope and
| likely read it without opening, but having anyone be able
| to touch their phone to the envelope to see I owe Y$ to X
| sounds worse. It's also nice in email since there's less
| to copy over, and my PC doesn't have NFC.
|
| I'd only prefer to have NFC over QR for in-store payment,
| and I transact way less money per month in-store.
| Y_Y wrote:
| You can also use NFC to just get a link, which is what
| you're doing with QR anyway.
| kevincox wrote:
| Yeah, as someone who just took a trip in China where QR
| payments are the most popular form it was clearly inferior
| from a UX standpoint from NFC. The most notable was a data
| connection. Cell service was pretty good overall but there
| were a few cases where we were struggling to get the payment
| through. Some merchants also have the ability to scan your
| code (which seems to be generated offline) but that leads to
| this confusing UX where you never know if you will scan (and
| should have the scanner mode ready) or be scanned (and have
| the QR code open).
|
| And there was always the fear that your phone dies and you
| can't take the subway or purchase everything. It doesn't
| happen often but on some long days you really don't really
| want to be tracking the battery of your phone super closely.
|
| NFC payments can work offline (although this is pretty rare)
| and can be authorized from a small plastic card that has no
| battery, no internet connection and is pretty robust
| including being completely waterproof. Plus 100% of the time
| I tap my card or phone on the merchant's terminal. No
| alternate UX option. Plus if you are using your phone for
| payments (which is a very convenient option) you don't need
| to open any app beforehand (WeChat is like 3 taps to get to
| scanner or code) and I found quick NFC reading to be more
| reliable than scanning a QR code where the lighting
| conditions and state of the QR code are not always perfect
| (it was almost always possible to get it to work within a
| handful of seconds, but often took a bit of fiddling around.
| NFC is reliably just tap and it works).
|
| I still keep a few large bills in my wallet in case the card
| networks are down, flag my transactions or whatever else. But
| having this immutable payment card that is incredibly
| reliable and easy to use is way better than the phone-based
| QR systems I have seen.
|
| What I would love to see if we bring phones into the system
| is a way of approving the transaction (including the amount)
| on your device. So for example 1. Tap phone 2. Review amount
| on screen and approve 3. Tap to commit payment. This is more
| steps but is far safer. That being said the number of times
| this has been an issue for me is 0, so it is probably better
| to just rely on the banking system to correct any mistakes
| rather than add extra steps to the payment flow.
| wat10000 wrote:
| The experience in China is weird. My first reaction was,
| wow, this is so futuristic, everybody takes payment by
| code. Then after a while I'm thinking, hold on, this kind
| of sucks.
|
| China's implementation could be done a lot better. There's
| no fundamental need for multiple incompatible systems like
| they have. But even improved, it wouldn't be as good as
| NFC.
| reorder9695 wrote:
| I also actually _like_ having a physical card that I can use
| with NFC so that I'm not fecked if my phone dies/breaks or
| anything. Physical cards to me are a feature.
| ghaff wrote:
| Yeah, it's not like I carry a stuffed wallet any longer,
| but I do have a small front pocket wallet with a handful of
| cards. It's actually easier for me to pay with a card (and
| increasingly mostly just tap it) than to pull my phone out
| and do whatever with it.
| 2Gkashmiri wrote:
| You haven't experienced UPI. Its a breeze. Everything works
| with everything else.
| wat10000 wrote:
| How does it solve these issues?
| maxglute wrote:
| QR code is more alternative to cash. Anyone can setup QR
| payment vs getting NFC POS terminal. IMO when you can
| reasonably expect day to day to be completely cashless down
| to smallest of merchant, it's more convenient compromise vs
| NFC + cash.
| tonyhart7 wrote:
| too bad for you, ever considering expanding in Asia???
|
| in Asia, using QR Code to pay anything in very common in here
| myflash13 wrote:
| While almost every other major economy in the world has developed
| their own government-mandated low-fee payment network, the United
| States is a corporate oligarchy. Hurrah for the free market.
| FabHK wrote:
| Seems misleading or at the very least incomplete not to mention
| that basically only the US has these high credit card interchange
| fees of 2-3%.
|
| EU & UK cap it at 0.3% (0.2% for debit cards), and the rest of
| the world are closer to EU than US fees, if I understand
| correctly.
|
| The power of the free market.
| dzikimarian wrote:
| Yes - entire cost of processing trx including all
| intermediaries in EU is around 1%. Less if you are huge.
| Unlikely they were able to beat it.
| voldacar wrote:
| Seems misleading or at the very least incomplete to blame these
| fees on "the power of the free market" when the visa /
| mastercard duopoly exists due to regulations making the entry
| barrier to creating a new card network essentially infinite
| TehCorwiz wrote:
| I think that was parent's point. That the US does not have as
| free a market.
| randallsquared wrote:
| > _EU & UK cap it_
|
| suggests that was not the GP's point.
| IshKebab wrote:
| I don't think it's due to regulations. It's just a natural
| monopoly due to network effects. Any new entrant has to
| convince hundreds of payment processors and retailers to
| accept their cards before anyone even has them. Regulations
| are a trivial barrier compared to that.
| abirch wrote:
| Anyone is free to use discover and it works for most
| merchants in the USA.
|
| American Express leverages the fact that most consumers don't
| care what the merchant is charged
| codedokode wrote:
| The problem is not that credit card companies charge large
| fees. The problem is that they do not allow to pass the fee on
| the customers. Because of this I don't like European regulation
| - instead of capping the fees they should just make clauses
| that not allow merchants to set a card acceptance fees,
| illegal.
|
| The clause that doesn't allow passing fees on the customer is
| the only thing that makes market non-free.
|
| I think it would be only fair if people paying with a card were
| charged more. They get the cash back from the bank anyway.
|
| Also I know that there are super-discounted stores in my
| country that do not accept cards for this reason.
| dsr_ wrote:
| They absolutely allow you to pass the fee on to the
| customers... as long as you phrase it as a cash discount from
| the posted price, instead of a credit card fee on top of the
| posted price.
| BenjiWiebe wrote:
| In the US it is legal to have card acceptance fees (in most
| states anyways).
|
| This changed a while back.
| HanClinto wrote:
| I'm super super glad this change was made. It genuinely
| makes me smile every time I go to a merchant and they
| raise the price when I pull out my credit card -- it's
| not always convenient for me to carry cash, but this has
| helped me trend in this direction.
| irusensei wrote:
| If it were really a free market we would have more
| alternatives.
| FuriouslyAdrift wrote:
| Rewards drive up transaction fees.
| https://insight.kellogg.northwestern.edu/article/who-pays-ge...
|
| "merchants are fee-insensitive, while consumers are rewards-
| sensitive. In other words, consumers pick credit cards (and,
| indirectly, networks) based on the goodies they receive, and
| stores will grudgingly tolerate high fees in order to accept
| credit cards."
| asdf333 wrote:
| ngl i read it as zenophobia pay
| codedokode wrote:
| What I need is not lower fee cards, but anonymous pre-paid debit
| cards that do not allow linking purchases to a person and
| profiling people. Until that appears, I will use cash only.
| irusensei wrote:
| Thats very hard to pull off due to draconian guidelines imposed
| by unelected shadow governments.
| WorldPeas wrote:
| does privacy-dot-com not do this? (this is a genuine question)
| tossit444 wrote:
| The cards they give are _mostly_ anonymous, but you still
| need to give privacy.com your ID, credit card, etc.
| aus10d wrote:
| The post is really interesting. Sorry it didn't work out for you
| guys. Thanks for open sourcing the code. The world REALLY needs
| better/faster alternatives to the big payment processors
| myflash13 wrote:
| Something weird happens whenever someone tries to disrupt the
| Visa/Mastercard mob. Even in this post, the founders alluded to
| being "not well connected enough". Also look at how Plaid's
| acquisition by Visa was cancelled by the DOJ on antitrust claims
| but then Plaid dropped its plans to build a pay-by-bank network.
| Makes no sense when compared to the lawsuits filed and dismissed
| in 2024 and recently July 2025 claiming that Apple tried to build
| a payment network but were stopped by Visa/Mastercard.
| rprend wrote:
| I appreciate you looking out for my well being, but really
| there was nothing shady here. We weren't forced out by a Visa
| mob or something like that. I actually wish that were the case,
| because that would mean that we were growing! We just aren't
| well connected enough to convince established merchants to
| switch over to a startup's payment network, especially since
| the value to them is dubious.
|
| But it's not like there was some shadowy Visa conspiracy. We
| received pre seed investment from institutional investors and
| built a pay-by-bank network entirely fine without anybody
| stopping us
| warkdarrior wrote:
| > We just aren't well connected enough to convince
| established merchants to switch over to a startup's payment
| network, especially since the value to them is dubious.
|
| So instead of competing on merit by improving the value
| offered to merchants, your concern is to become connected
| enough to have the merchants switch to you in spite of
| "dubious value"??
| BlimpSpike wrote:
| If you read the article they do give merchants more value
| in the form of 2% lower fees. It's just that that's not
| enough.
| myflash13 wrote:
| Thanks for the clarification in your particular case. No
| offence, but you were then probably not big enough to matter.
| There is plenty evidence of shadowy forces shutting down
| payment systems, however, just look at Marc Andreessen's
| public statements about crypto founders he invested in
| getting debanked.
| xeromal wrote:
| Zenophobia
| rprend wrote:
| nooooo zenobia is an ancient queen
| FredPret wrote:
| Let me say first of all that the card networks do great work
| enabling commerce by being lightning-fast and generally secure.
|
| I can securely complete transactions and subscriptions with
| ~anyone on the planet in mere seconds.
|
| But holy cow do they have large margins. 40-50%!
|
| The profit growth charts on these two are a sight to behold.
|
| http://valustox.com/MA
|
| http://valustox.com/V
|
| The situation is simply begging for disruption.
| SteveNuts wrote:
| It's amazing how it wasn't _that_ long ago that you 'd walk
| into an establishment and ask if they accept cards instead of
| cash only.
|
| Going into rural areas it's still not a 100% given that all
| places will accept cards.
| jvergeldedios wrote:
| Even more interesting is the small establishments that
| skipped over credit cards straight into Venmo/Zelle.
| SJC_Hacker wrote:
| There was even a place in Silicon Valley would not accept
| anything but cash, but I haven't been there in 4 years so
| don't know if its still the case
| jrm4 wrote:
| _Wild_ how far down I had to scroll to even see "cryptocurrency"
| mentioned.
|
| Normally, I'm not a fan of always relying on incentives, but you
| can't begin to tackle this problem without understanding, and
| being grossly open about the fact that it's almost certainly not
| a "tech capability/efficiency" problem, but a (naturally) greedy
| financial sector company problem.
| amadeuspagel wrote:
| Istanbul has a card that you can use to pay for some things like
| public transit and have to use to pay for public bathrooms
| (because that's so cheap that if you paid with credit card, the
| fee would more expensive than the payment).
|
| Maybe this is a way to break the credit card duopoly: offer
| something (like public bathrooms) that requires your card, and
| then try to expand it from there.
| yobbo wrote:
| Many cities have rechargeable public transport cards.
|
| Famous Japanese example: https://en.wikipedia.org/wiki/Suica
|
| The plan: 1) Build correct and
| cryptographically sound open protocol for NFC cash-cards
| 2) Offer tech to public transport (as free open source)
| 3) Boom. Millions of users of an open payments system
| robertpohl wrote:
| What many people are missing is what is in the fees. Consumer
| protection and risk mitigation. If you are dealing with "cash"
| payments, like A2A or crypto, there are no consumer protection.
| Not even auth and capture flows. These are basic needs in a
| transactional commerce system, which the card companies provide.
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