> Like most monopolies the quality and price of service is not actually that good.
I can go all around the world with just a single piece of plastic for payment. Some merchants only take local physical currency, but any merchant that has an internet connection can get a device that will securely charge my account in about 5-10 seconds max, automatically converting between local currencies. It is as close to what science fiction writers in the 1950s imagined. If there is fraud, I as a consumer pay none of the costs. Say what you will about the price and cost to merchants (most of which goes back into my pocket as points/cashback), but the quality of service is fantastic.
If you want to pay 3% more for that privilege (as a transaction surcharge), I think that’s fine, but others should be able to opt out of the rake when there are suitable instant payment alternatives (which there are in 54 countries, with the US getting instant payments next year). Pushing financial specific ISO messages on a bus should cost cents, not percentages, per transaction (US instant payments will cost $0.045 for up to $500k in value transfer, for example [1]).
Otherwise, you’ve got 3% drag on your economy for the benefit of some and the middlemen facilitating extraction. It was magic 30 years ago, today it should be as boring and profitable as residential water or electric service.
Sure. I wasn't saying anything about the price. I was just responding to the statement that the product is not good. The product is great. The price may not be worth it. But lets not pretend like Visa/MC is a substandard product.
How is the product great? It's exactly the same as any other such service. If I didn't look and randomly picked a cc from my wallet I wouldn't even know which card I paid with until I look at the bill.
The fact that Visa and Mastercard have these great margins is entirely down to their duopoly. In a competitive market the fees would be massively lower because it's not actually that expensive running the network. 2%, think about that! With the amount of transactions they do they're printing money. You're paying for this, it's your money and that of every other person, even those who do not use the companies, because the vendors pay the fee. That's the genius part of their model and since most people don't care about finance they don't understand how they're being ripped off.
I don't know why people think I'm interested in talking about the fees. I'm responding to the quote that "Like most monopolies the quality and price of service is not actually that good." The price may be a ripoff, but the quality of the service is good. The reason you can pick a random CC from your wallet without thinking and it just works is because of the oligopoly. Credit cards 'just work' virtually everywhere, and that is a huge part of what it means for a payment system to be high-quality.
What other payment system currently offers the same speed, ubiquity, reliability, and fraud protection to consumers? If I'm going to travel the world, I'm going to rely on Visa/Mastercard for a reason.
Although at lot of places ban the display of higher prices for credit use. Which discourages most customers, so they settle for showing a single price and skipping the discussion of a discount. Because why would you offer people a way to pay less?
I can go all around the world with just a single piece of plastic for payment. Some merchants only take local physical currency, but any merchant that has an internet connection can get a device that will securely charge my account in about 5-10 seconds max, automatically converting between local currencies. It is as close to what science fiction writers in the 1950s imagined. If there is fraud, I as a consumer pay none of the costs. Say what you will about the price and cost to merchants (most of which goes back into my pocket as points/cashback), but the quality of service is fantastic.