In the US there actually exists (begins to exist) now a cheaper alternative to credit card payments: FedNow. See https://en.wikipedia.org/wiki/FedNow
It's an instantaneous bank transfer, without a credit card company in the middle extracting rents.
For dodgy/disreputable online shops, credit cards will still be better, due to the possibility of chargeback. And of course for actually buying things on credit. But for most regular cases, this shouldn't be necessary.
Systems like FedNow are already highly successful in India (UPI) and several other countries.
>The idea that accepting cash is cheap is actually a myth. While some business owners might think the 3 percent fee for processing credit cards is a burden, research from IHL Group shows that cash handling costs many retailers between 4.7 and 15.3 percent. This means for every $100 sale, a business is paying between $4.70 and $15.30 just to manage their cash. And, the cost is only increasing as more businesses and consumers trend away from cash.
>Handling cash also comes with many unwanted risks. The process business owners must go through to manage cash is a clear burden. They have to account for it; count the drawer nightly and rely on employees to use the honor system when doing so; package it up and either hire a courier or send an employee to transport it to a bank; pay fees for processing and handling; and ultimately run the risk of exposing the employee, cash, and the business to liabilities that may not be recoverable.
https://www.plainscapital.com/blog/the-cost-of-accepting-cas...
But, God forbid that the government build any infrastructure for the economy's main highway, and crypto is the only alternative possible.
That’s also one of the main criticisms. If you pass around a 50$ bill it stays 50$. If you pass around 50$ online fees eat it up and it’s gone.
Credit card processors end up having unjust influence over every business that has a significant online component, and the processors don't hold back from using that influence to force the hand of many businesses that aren't big enough to fight back. They simply threaten to block the business for having X objectionable but legal content.
For context, the current chair of the FTC is Lina Khan who is only 35 years old. She became famous while a student at Yale Law School for writing Amazon's Antitrust Paradox [1], which has come to revolutionize the thinking on antitrust.
A recent example is asthma inhalers. An asthma inhaler in the US costs ~$500. In France it's $7. Now we can't just import from overseas. That's illegal (because reasons). So how are generic inhalers blocked? By tricks to extend patents. In this case, the patent holder justifies a patent extension with a small piece of plastic on the cap so you don't lose it.
That's all capitalism does: it builds enclosures, on this case on "intellectual" property and by buying the government to create a monopoly by banning imports and banning Medicare from negotiating prices.
Just the threat of FTC action and a Senate investigation has created concessions by (so far) 3 of the 4 inhaler makers agreeing to cap inhaler costs at $35. From $500. With just a threat.
Companies are so concerned about this that big donors to the Harris campaign want Lina Khan fired [2] (she is, of course, history in the event of a Trump victory in November).
This should be a lesson in both the necessity of regulation and how easy it can be if you halfway try. The idea that the government is bloated and ineffective is propaganda by those who want to poison the water supply to make a slightly higher profit.
Personally, I want the FTC to go after national ISPs.
And I fully support investigation and regulation of the Visa payment network.
[1]: https://www.yalelawjournal.org/note/amazons-antitrust-parado...
[2]: https://www.bloomberg.com/news/articles/2024-09-06/kamala-ha...
Without exaggeration, you can make instant money transfers across banks; buy stocks, gold, insurance, bonds, foreign currency; pay taxes and other government fees; make international SWIFT transfers; open retirement accounts; buy private healthcare; instantly open as many checking, savings, CD accounts as you want; and many more.
And in the US, they try to sell Zelle as the biggest innovation in banking. It's just pathetic.
And let me be very blunt so people aren't confused, I think if Trump wins, the people he installs in the DOJ will be less than motivated in pursuing these cases.
~1900... ~1950... ~1980... ~2000...
About time for the wheel to turn around.
but alas....
Hasn't this basically been the state of things since the late 1990s? What changed that they're going after them now?
[0] https://www.reddit.com/r/stocks/comments/1dyb7t0/whats_going...
60% seems pretty well short of monopoly. Also, if you factor in that cash is an option, and the significant inroads being made by options like Square and Venmo, Visa doesn't actually even have a majority in the market.
I'm skeptical of this action overall. I love competition as much as the next guy, but Visa, Mastercard, and Discover's primary value they provide is fraud detection and prevention. There are enormous economies of scale at play, and it's hard to believe that breaking up the big guys into dozens of independent, fly-by-wire cut-rate providers is in the public's best interests long term. That is, unless the federal government wants to come in and actually pursue small-time fraud.
Is that really a monopoly though?
If you want to add middlemen as companies built on the cryptocurrency, you can and for some things they might be useful. But you absolutely should not need them by default in the contemporary era where we have cryptography and the internet.