Growing up, my parents had a Discover card (among others) and everywhere we went, I remember them asking if they took Discover because so many places didn't. It wasn't until years later when I saw the joke about this on Futurama that I realized this wasn't a unique experience:
> Fry: Do you take Mastercard? > Employee: Mastercard has been out of business for 100 years. > Fry: Okay, do you take Visa? > Employee: Visa has been out of business for 200 years. > Fry: Hmm, do you take Discover? > Employee: Sorry, no, we don't take Discover.
[1]: https://en.wikipedia.org/wiki/Payment_Card_Industry_Data_Sec... [2]: https://www.pcisecuritystandards.org/
They did start the first payment card that wasn’t linked to a specific company (i.e. the American Airlines card).
Store accounts/cards have indeed been around significantly longer.
The distinction between a credit and a charge card is not that relevant in that context, in my view: For both, you spend an issuer’s money at unaffiliated merchants and pay the issuer back later.
Does anyone know when this changed? I don't think I've just been lucky this entire time.
Edit: When traveling overseas, I've always just used VISA though, but that's just because I have a card without foreign transaction fees with them.
Amex charges significantly more than the others, to the point that multiple businesses I frequent offer a sliding scale - par for cash/check, +2-5% for Visa/Mastercard/Discover, +5%+ for Amex.
This is just one more input to an optimization problem for me, but for merchants makes a significant difference: my mechanic says he saves thousands of dollars a month by turning Amex customers into Mastercard customers, and Mastercard customers into cash customers.
Costco was unique because they used to only take Amex credit cards and then Citi/Visa won that business.
In Europe, more aggressive adoption of SEPA instant payments.
TLDR utility priced payment rails provided by a central bank or other neutral clearinghouse, instead of a for profit corporation trying to maximize its skim off of nation state or some fraction of global commerce volume.
https://news.ycombinator.com/item?id=36801491
https://techcrunch.com/2023/10/11/mastercard-india-upi-econo...
https://www.ecb.europa.eu/paym/intro/news/html/ecb.mipnews23...
https://www.ecb.europa.eu/pub/pdf/other/ecb.eurosystemretail...
We are discussing OnlyFans and WikiLeaks, the only reason you can't pay them is because credit card bosses said so.
HSBC is a premium service, cant afford it untill you are a boss of a drug cartel
For your local purchases with trusted entities, you can still use cash.
It also goes the other way. Go and try to purchase something from any business on credit when you don't have the money right now. They will always say no, even if you've been shopping there for decades. Visa and MasterCard always say yes.
People love to rail against the CC companies, but if you actually clear your mind and think about it, their payment systems are incredible.
https://www.axios.com/2023/07/22/fednow-instant-payments-cre...
> Interchange fees — the swipe fees paid by merchants when customers pay by credit card — reached $100 billion in 2022, per Matt Schulz of Lending Tree. That's more than $800 per household.
> In a world where goods cost the same regardless of how they're paid for, it's entirely rational for consumers to pay with credit cards and then collect their kickbacks.
> There's no particular reason why this kind of financial intermediation should be a $100 billion industry, rife with inefficiencies.
> "The shift to instant payments is inevitable," writes TD Cowen analyst Jaret Seiberg in a research note, "though it will take time."
(work at a fintech payments-adjacent, thoughts and opinions are my own)
You mention BNPL, but those systems AFAIK are much worse for the merchants, with very high fees. I'm not sure I understood the insurance per purchase part, but if the vendor is going to scam you, he for sure is going to scam you on the insurance as well. Who sells this insurance and how?
> There's no particular reason why this kind of financial intermediation should be a $100 billion industry, rife with inefficiencies.
What are the inefficiencies really? As a customer, paying by card deducts the money from my bank account instantly. As a merchant, card sales are paid into my bank account the next day.
> You can extend credit instantly to someone with a deposit account like you would with a credit card (with the "overdraft" being the issued credit, lots of ways to skin the UX around this).
I apologize, but I didn't understand this part. How will the merchant instantly open an account for a customer? How would this be as fast, secure and convenient as swiping a card?
My solution for property taxes has been to just set billpay every year to send them a check at the expected intervals.
Precisely why credit cards are a hidden parasite on overall economic activity. They incentivize customers to use to get rewards and then take a ~4% cut of the payment from the merchant. So that's why merchants charge you extra fee they need to make up that 4% cost somewhere and it's either fees or raising prices even though you might not realize it.
I've run a SaaS in the past. About 10% of all US customers were cc fraud, by far the worst rate by country in my data.
I've lost about ~7 dollars on any transaction that went through and then got refunded. I never had any fraud issues with any other payment method.
For me accepting credit card was a pain and costly, but you are telling me for customers this is painless?
Start buying things with cash again.
I can name you at least 50 shops that dont take credit card but at least 2 different payment methods.
It's a pretty clever scheme by the card companies where the have raised the price for people not using their services.
Not exactly easy but it’s not impossible. An app based system could probably do it and force ApplePay and GooglePay to use it in those areas. They will if it’s in place.
https://en.wikipedia.org/wiki/Access_(credit_card)
They spent all that money on advertising, I still remember it, but for what?
This and Harding and Hobbs
So European cards worked but the owners ie banks wanted global ones.
But given the network effect, Visa and Mastercard have a lot of power over both issuing and acquiring banks. Issuers have at least a choice out of these two; acquirers just have to accept whatever their customer puts on the counter at payment time (or lose ~50% of their card-paying customers).
In other words, participation is (relatively) easy; getting some amount of control, let alone autonomy, is almost impossible – again due to the network effect.
The European banks just sold their stakes in the late 90s to the US parents, because they supposedly didn't see a future in that business model...
Also, some businesses, such as car rental companies, won't provide services to debit card holders.
Also, it's a free loan (if you pay credit card bills in full); you get some small marginal revenue from the money you keep for up to a month.
And that's why we're in this mess to begin with. Credit card transactions are reported to credit bureaus (from a quick web search, it looks like debit card transactions aren't) and this normalizes the idea that your financial data should be shared freely amongst finance companies.
There's really no such thing as a free lunch, or a free loan. When someone offers you one, it's good to understand how you're going to be paying for it.
A cash transaction is between 2 parties. A debit card transaction is between 5: consumer, consumer's bank, merchant, merchant's bank, payment network/card provider.
You also get fraud protection.
It’s not free, but you’re not necessarily paying for it. The main concern is that some people are definitely paying for it disproportionally more than others.
If there was no credit reporting, the lender would still need to loan just as much. They would base their decisions on other factors (down payment, wages, employ stability, assets, ...) rather than the extremely invasive credit rating.
In America, yes. Not really a thing in Europe, at least not in any places I’ve been to.
In the US, the rental agreements let them keep charging you the daily rental fee until the amount collected exceeds the value of the car.
Your issuer is only liable for the few hundreds of dollars that the rental car company has authorized; beyond that, it's still their (or their insurance's) loss.
The only practical difference is that you're not out that money on your checking account for a few days, which can indeed be inconvenient – but arguably that's not really the rental car agency's problem?
The issuer can also sell that debt (daily rental up to car value) to a debt collector.
It’s probably to avoid lending the car to higher risk demographics.
It’s a test.
The rental car company basically loses fewer cars overall and thus has lower insurance premiums, and thus can offer cars cheaper than other rental companies that do not require a credit card (if any even still exist?) that have higher premiums to pay.
Which unfortunately creates all kinds of false-positives, like making it very hard for tourists from countries where credit cards are not commonly used to rent a car…
That said, you’d think they’ve considered exceptions based on your passport?
I think most debit cards, at least in the US, can also be authorized on the credit rails, and can therefore be used to rent cars. It's always worked for me.
Of course if you do that anywhere else, you have to restart the flow.
This almost ruined our vacation. I didn't have a drivers license and my SO didn't have a credit card. I've never had any issues renting cars here in Norway, both with credit and debit card, despite not being the driver.
But not in the US, no no! Credit card had to be on the same name as the drivers license.
And so we stood there, just having exited the plane, our two week vacation turning to dust in our minds as a car was most definitely needed.
After some desperate attempts by us at finding a solution, the manager came by, having noticed the commotion. After some thinking she asked where we stayed. We had rented a place through Airbnb, which turned out to be the solution. Using the zip code from that place, she could register the debit card, and we finally got a rental.
[1] https://www.statista.com/statistics/968220/credit-card-owner...
The system we use in Switzerland (Twint) has everything you'd need for barely any fee and real privacy laws, for everything else and over border transactions there is SEPA. There is simply no need for anything else than that.
Nobody is looking to use Google pay or apple pay when we already have a perfectly fine system with way lower fees.
Those apps are easy to make and don't have to get any special system access to NFC hardware.
Small merchants can just use their existing phones or get iPads, although the payments are now also integrated into merchant systems and the standard card readers in shops now also have a camera to scan QR codes.
For smaller entities it's a PITA to have to manage a separate additinal contract, and it costs a lot more for the merchant, when virtually nobody only owns an Amex.
If you're in europe there are probably other payment means that don't rely on Visa/Mastercard thay will be much more welcome.
Funny thing to me was the store credit cards that are processed internallu without hitting the network (e.g. Carrefour cards, AlbertHein as well I think ?)
It’s almost as if a business needs to decide if it’s mass market or high end. I would only buy certain classes of goods with my AmEx due to how confident I am that Amex customer service has my back.
For example, the Amex platinum card will reimburse you for items the merchant won’t accept as a return. I recently bought an electric screwdriver that sucked, but wasn’t able to make a decision until I’d used it for longer than the merchant return window. I paid with amex and just got it refunded.
As a consumer that has real value.
Of course, that value is entirely funded out of your own pocket.
Instead of paying with your Amex for overpriced goods, you could put a bit of money to the side for every normal purchase, and use that pot to 'refund' your electric screwdriver yourself.
The Amex makes me confident I have recourse. Is your point that I would spend less if I didn’t have that confidence? I suppose so, but I’d actually rather prefer having that confident experience rather than feeling insecure or like I got ripped off.
That’s real value, and I don’t mind if it means I buy an extra tool here and there. Especially if I can get some extra refunds.
Cheaping out on processing fees or putting friction on the payment part will be a signal that you don't understand your customer and will potentially be nickel and diming the experience all the way down, which is clearly not the image you're trying to convey.
In other countries like Romania the taxi drivers just laugh in your face when you try to pay with an amex. I hate that thing but our stupid HR VP from the US forced it on all of us. Probably gets some nice kickbacks in return.
I completely agree on the cost part for AMEX, but how do you mean it's a PITA to accept those cards? It's usually as simple as enabling an option with your card payment service, not very complicated at all.
Never heard of that. What are some examples?
https://www.ecb.europa.eu/paym/intro/news/html/ecb.mipnews23...
Here [1], it says:
> strong potential for "wero" to emerge as the leading wallet for the digital euro central bank digital currency (CBDC)
Great, but I am not sure about its potential to safeguard our privacy. One can hope maybe they wont sell our data to commercial entities.
[0]: https://www.epicompany.eu/european-payments-initiative-selec...
[1]: https://payments1connectingthedots.substack.com/p/new-kid-on...
You create a publicly-funded option.
https://finance.ec.europa.eu/digital-finance/digital-euro_en
Depends on the country!
Amex is accepted in many places in Germany these days (though you definitely still need to carry another card, so it can't be your only card).
And Discover and Diners Club are actually the same network, so in the European countries that have strong Diners Club acceptance, you can usually also get by with Discover. (No idea about how good the exchange rates are, though; those of Diners Club in the other direction are atrocious.)
At least here in Europe MasterCard and visa are the only options. Amex and Discovery are really unusable here.
Besides selling our data this also means we get American morals pushed on us, eg they won't provide payments for some websites they don't like.
But how do you break up such a duopoly?