VISA offers restaurants $10,000 to stop accepting cash

Re:VISA offers restaurants $10,000 to stop accepting cash by Frondo on Saturday July 15, 2017 @02:34AM (#14775299)

Man, when I read about how the swipe fees for credit cards remain so high (3%!!), even decades after the infrastructure's been built out and can chug along in maintenance mode, I just think.. where's the market solution to this? Where's the upstart processor that charges 1%, still make bank because it's just 1s and 0s now, and exert real competitive pressure on Visa and MC?

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Re:VISA offers restaurants $10,000 to stop accepting cash by vmarsy on Saturday July 15, 2017 @02:43AM (#14775329)

The legal way might put pressure on Visa and MC, their attempt at a settlement failed last year [1]. I don't know what happened next.

> The settlement may now need to be renegotiated, or the case could go to trial.

> "Swipe fees are an improper and unnecessary hidden tax on consumers," said Jeffrey Shinder, a Constantine Cannon partner representing Amazon.com Inc (AMZN.O), Costco Wholesale Corp (COST.O), Wal-Mart Stores Inc (WMT.N) and other opponents of the accord. "The structure of swipe fees is back on the table."

Anyone knows if the case went to trial after that court of appeals decision?

To compare, in the E.U. [2], "the Regulation caps interchange fees for consumer debit cards to 0.2 % and consumer credit cards to 0.3 % of the value of the transaction.". In the U.S. the fees today seem to be 10x higher[3].

[1] http://www.reuters.com/article/us-visa-mastercard-settlement...

[2] http://europa.eu/rapid/press-release_MEMO-16-2162_en.htm

[3] https://www.richmondfed.org/~/media/richmondfedorg/publicati...

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Re:VISA offers restaurants $10,000 to stop accepting cash by myroon5 on Saturday July 15, 2017 @02:38AM (#14775318)

Those who pay the fees (merchants) aren't the ones who chose which cards their customers have. High fees also seem to allow high rewards to draw more consumers. I think it would be difficult to challenge Visa and MC just by undercutting them. It seems that regulatory action is the most likely thing to break Visa and MC's dominance.

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Re:VISA offers restaurants $10,000 to stop accepting cash by omarchowdhury on Saturday July 15, 2017 @02:38AM (#14775317)

Charging 1% for existing payment network card transactions would put them out of business real fast when the wholesale cost to processors is more than 1%.

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Re:VISA offers restaurants $10,000 to stop accepting cash by mrep on Saturday July 15, 2017 @02:54AM (#14775373)

Those costs are only so high because of reward systems that pay credit card users for purchases.

Get rid of all of the rewards and 1% is easily enough to cover transaction costs.

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Re:VISA offers restaurants $10,000 to stop accepting cash by myroon5 on Saturday July 15, 2017 @02:39AM (#14775320)

Do you have a source for this?

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Re:VISA offers restaurants $10,000 to stop accepting cash by omarchowdhury on Saturday July 15, 2017 @02:51AM (#14775359)

https://usa.visa.com/content/dam/VCOM/download/merchants/vis...

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Re:VISA offers restaurants $10,000 to stop accepting cash by snovv_crash on Saturday July 15, 2017 @02:57AM (#14775384)

Then how do they operate in the EU, where the fees are capped at 0.3%?

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Re:VISA offers restaurants $10,000 to stop accepting cash by mrep on Saturday July 15, 2017 @02:44AM (#14775334)

businesses do not generally* offer discounts to customers that pay in cash so consumers use the high return cards that also cost businesses the most in fees. Aka, it's the current inefficient market standard.

*business that have lots of small transactions often charge extra for credit card purchases below a certain amount and big purchases will also charge extra since the marginal/absolute cost is a lot.

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Re:VISA offers restaurants $10,000 to stop accepting cash by fosk on Saturday July 15, 2017 @02:43AM (#14775332)

Who knows, maybe cryptocurrency will be the answer for this, by accepting Bitcoins/Litecoins at the cashier.

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Re:VISA offers restaurants $10,000 to stop accepting cash by mrep on Saturday July 15, 2017 @02:46AM (#14775341)

At 5 dollar transaction fees [1], credit cards are much cheaper for most cases (they also give rewards for purchases).

[1]: https://www.reddit.com/r/btc/comments/6gek0z/average_bitcoin...

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Re:VISA offers restaurants $10,000 to stop accepting cash by kobeya on Saturday July 15, 2017 @02:50AM (#14775355)

That's what off chain payments is for.

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