I’m very clear that faster wires is not what I want, and neither is debit, although that’s fine too.
I want equal access for all merchants to VisaNet and its peers. Not because debit or faster wires wouldn’t meet needs but because they are not how people are choosing to pay. I’m being pragmatic.
But thank you for explaining payments to me.
Ok.
>neither is debit, although that’s fine too. I want equal access for all merchants to VisaNet and its peers.
This is such an odd thing for a payment professional to say. Are you under the impression that debit transactions don't run on Visanet?
>not because they are not how people are choosing to pay. I’m being pragmatic.
Again I implore you to look to Europe/Asia, where there are plenty of non-network cards that works just fine for essentially free payments (and would you like to guess how those transactions are settled? You must know...) [1]
I think you're misunderstanding me. That's not what I was saying at all.
My argument is that payment networks, issuers and acquirers should not decide unilaterally what kinds of lawful merchants, customers and transactions they permit. I'm talking about various merchant acquirers not permitting lawful gun or drug sales, networks going after OnlyFans in 2021, and PayPal shutting down WikiLeaks' account back in 2010. [1,2]
I don't necessarily agree with what these people or businesses are doing personally but it is not my decision to make nor should it be that of any other private entity. If they are lawful, they should be permitted. If they aren't then the business owners/operators should be prosecuted - or at minimum there should be a legal proceeding that can be appealed by the target party when payments processing is suspended.
Somehow we hold domain name registrars to a higher standard than the aggregate of payments entities in this regard.
> Again I implore you to look to Europe/Asia, where there are plenty of non-network cards that work just fine for essentially free domestic payments (and would you like to guess how those transactions are settled?
That's not really the point.
My point is that these aggregated payments entities are the infrastructure of the modern economy. Giving a few private entity gatekeepers the ability to extrajudicially decide what is and is not permitted in the modern economy - without appeal or recourse - is undemocratic, and it's wrong.
While different options exist in different places, one should not be forced to seek them out to participate in the lawful economy. It's simply too important.
I am advocating for a modern, digital equivalent of '[valid] for all debts public and private.' We have granted these aggregate systems a de facto duopoly on commerce in the United States. They are quickly becoming or already are essential and so it's time we treat them from a legal and regulatory perspective more like what they are.
How long would Amazon last if they were cut off? Why do we give two private entities the ability to decide if Amazon can continue to exist?
[1] https://www.protocol.com/policy/onlyfans-visa-mastercard
[2] https://www.theguardian.com/media/2010/dec/04/paypal-shuts-d...
So a few things.
1) A credit card is a consumer loan and by nature, there's plenty of limits on the things you can buy with loans (both crypto and fiat), so you're at a dead end there (and if it weren't Visa, it would be the bank extending you the loan that would ban the porn payment).
2) Given that, you probably are referring to debit cards in this case. Ok that's more of a dumb utility so let's run with it. What Visa does for debit (I implore you to learn more about this!) is serve as a messenger intermediary between your checking account and the merchant's account (plus they make sure the issuer gets their cut of fees, more on that later). Ultimately, they help the banks settle their accounts via inter-bank accounts. Banks themselves can/should do this! The government should force them to do this! But that's then just faster wire transfers (look at Europe).
I mean I'm very happy to be wrong here, but you need to explain to me why Visa needs to be involved for a fraud-protection-free bank-to-bank transfer and why I as a consumer should pay for that.
>Luckily that's already well under way. We should have RTP and FedNow next year.
Yeah.
>Good news! We're not, and at least in recent history we never were! :) Merchant acquirers charge high-risk merchants significantly more to cover chargeback risk. That risk isn't meaningfully transferred to your Costco run. While a Costco may pay 1-2% in interchange, your average adult video business may pay 10-12%. Sometimes more.
Ok again so a few things.
1) You are citing the entire take rate on transactions but you're calling it the wrong thing. Interchange is the fee that's paid to the issuing bank; in the US this is, on average, 70% of the fee-rate you're citing. Merchant Discount is the fee that the merchant acquirers get; in the US this is, on average, 15% of the fee-rate you're citing. Network fees are the fees that Visa collects ; in the US this is, on average, 15% of the fee-rate you're citing (Visa makes $30bn of revenue $10tn of transactions processed). Acquirers can choose to set their merchant discount at whatever they want, but again that's a banking issue not a Visa issue (Visa doesn't eve see the merchant discount)
2) Now that we understand who charges what yo whom, you'll see that in fact, Visa does not charge a different rate for porn [1], they instead collect a pretty small fee on all transactions to support infrastructure that disproportionally serves porn users who regret buying porn. Sure sounds like a subsidy to me!
So yeah anyway, faster wires.
[1] https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-in...