Re:U.S. credit card debt jumps 18.5% and hits a record $930.6B
by plonk on Friday February 03, 2023 @03:26PM
(#34647243)
I think you misunderstood the GP: there is debt, but it's owned by banks, not by VISA and MasterCard. They just provide the payment network.
[ Parent
| on HN ]
Re:U.S. credit card debt jumps 18.5% and hits a record $930.6B
by notch898a on Friday February 03, 2023 @03:28PM
(#34647266)
Do the banks directly transfer to one another? I'm genuinely naive on this topic. I don't even get the value add of visa at that point.
Re:U.S. credit card debt jumps 18.5% and hits a record $930.6B
by plonk on Friday February 03, 2023 @03:43PM
(#34647479)
Not an expert either. As I understand it, credit card networks provide the infrastructure that lets entities settle payments: providing cards and authentication, routing payments from consumer's bank to seller's bank, handling clawbacks, etc. At world scale it's got to be a huge engineering problem.
Re:U.S. credit card debt jumps 18.5% and hits a record $930.6B
by quickthrowman on Friday February 03, 2023 @04:48PM
(#34648186)
Yes, banks do net settlement with each other. They tally up all the debits and credits on both sides and then make a single transfer to settle between each other. Say Bank A owes Bank B $200, and Bank B owes Bank A $150. Bank A will send Bank B $50, as that is the net amount after subtracting 150 from 200.