One thing I've noticed with the bigger gas station chains near me is a push to have users download their mobile app, set up ACH payments, and use that as their payment method instead of credit cards in exchange for 10 cents off per gallon. From the merchant side of things, they're paying about $0.60 to process the transaction via ACH, versus $2-$2.50 for credit card transactions, per fill-up. So even if they're merely breaking even once the discounts are factored in, they're still disrupting the credit card companies' dominance.

I would not be surprised if rather than continuing to battling it out with the credit card companies to negotiate for lower fees, more and more retailers adapt to the cashless economy by leaning on ACH in lieu of credit cards, especially in market segments where repeat business is common (basically any retailer that has an existing loyalty program).

To put it another way: Sure, litigation is an option, but even if you win the concessions you want, it will leave the credit card companies entrenched. Pushing more customers to pay via non-credit-card methods has the benefit of more immediate financial impact, less reliance on the legal system, and deterioration of the power that led to the anticompetitive behavior in the first place.

Basic reforms that could solve this problem:

1. Merchants need to be allowed to add card processing fees on top of any transaction, and it should be possible to do this very easily. If not this, then any receipt should be required to include card processing fees.

2. Merchants should be allowed to pick and choose which cards they accept without penalty.

Those two simple changes would add competitive pressure back into the payment processing market, and quickly cause fees to lower.

I do think we're getting to the point that middlemen don't have much value add. Economics even suggests they don't add value I think. Possibly neutral markets, payments, and logistics should just be a public service.

I wish they would face litigation for banning the sale of large swaths of content (or even banning the content altogether on sites relying on donations/subscriptions to survive). Paypros have no business being censors.

A reminder to listen to the Visa episode of Acquired Podcast if you truly wish to understand the scale of Visa and how it all works. Even at 3+ hours you'll love every minute of it.

https://www.acquired.fm/episodes/visa

I think a lot of this is starting to bubble up to the surface after PIX made headlines[1]

[1] https://whatispix.com

What seems to be getting lost is that the acquirer, not the payment network, sets the Merchant Discount Rate. The acquirer is also the merchant’s direct payments provider.

Yet the acquirers seem to be always absent from these lawsuits.

I think I would push back on the idea that credit and debit cards represent a deadweight loss to the economy. Operating a cash business has its own expenses - theft risk (employee or otherwise), handling time, and (most importantly) you are limiting your customer base to only cash. There's a lot of reasons lots of small businesses are going card only.

For good or bad, a lot of studies have confirmed that cards have overwhelmingly increased consumer spending.

I think the far stronger case is that the industry has no actual incentive to fix the underlying fraud that they are charging merchants to fight. They have done a lot of work to institutionalize the problematic infrastructure and make it almost impossible for startups or outsiders to fix.

I hope more things like this comes to light, as we have seen how mastercard and visa in union has moved censorship among things around the world, which by the way is illegal, but due to their monopoly could still carry out and they did.

So the hope is that new or one of the other brokers step up and hopefully their ethics are better.

I think being able to see all the charges (card fee) will help a lot

Credit card companies are absolutely parasitic middle men.

What's the intended outcome?

If you break up the Visa and Mastercard cartels, does this San Diego pizzeria then have to decide what cards to accept on a bank-by-bank basis?

I’d like to know more about what changed in the last few years that’s pushing more and more merchants to pass the card fees on to customers. Is it just thinner margins and more precarity everywhere? Is it changes in the legal/regulatory environment? Or has it just become more acceptable?

That's how we do it in the US. We let industries consolidate and merge until they can raise prices with abandon, then chip back away at it with lawsuits.

Easier Bank to Bank settlements would likely have avoided this situation.

Wouldn't high fees be competitive? A lot of incentive to compete there. Anticompetitive would be setting the fees too low to compete with.

I guess the point being there is probably a better reason for the high fees than the company trying to be anticompetitive, Or perhaps better said as a better reason for being anti competitive than high fees. Monopolistic lock in? Regulatory Capture? The problem is, that this blames the government instead of the company.

FedNow charges $0.045 per transaction and runs 24/7 and payments are instant. A better solution would be bank cards that used the FedNow network already in place which would send money directly to the merchant, bypassing visa/mastercard entirely.

I've been using Same Day ACH in all my businesses for over a decade and the transaction fees are about $0.30/transaction and the dispute window is 60 days for PPD (personal checking accounts) and 3 days for CCD (commercial check accounts) and you get the money the same day. It beats paying visa/mastercard percentage fees and the 120 day dispute windows where people can literally get their money back four months later for work that was already performed. By using Same Day ACH, we get the money from the customer faster, save potentially millions of dollars in fees, and reduce dispute windows from four months to 3 days (for B2B sales)

Aren't anticompetitive fees the American way?

Slight digression. This podcast/article is a good explanation of why people who partake in a class action rarely see any of the settlement money:

https://oliverbatemandoesthework.substack.com/p/the-work-of-...

"We have a case pending right now in the Ninth Circuit. It was a privacy lawsuit against Google. A journalist, not a trial lawyer, determined that you could turn off tracking in Google Maps and it was not supposed to share your data, and then learned that Google was sharing it anyway, whether you turned it off on your phone or turned it off in the app. State attorneys general came in, fined Google a bunch of money, and forced Google to stop. And simultaneously there is a follow-on class action built on the journalists’ research, and that has settled.

The settlement is that Google creates a fund of sixty-two million dollars. The lawyers get nineteen million and the class gets zero. The rest is a big slush fund for a set of left-wing groups. Nothing requires the recipients to be left-wing other than that being what the attorneys chose to present to the court. They do it partly because some of these organizations are clients of the law firm, some of them have lead partners of the firm sitting on their boards, some of them are the attorneys’ alma maters, and some of them are just left-leaning outfits that are promising to do left-wing things. The class is two hundred million people. Maybe a hundred fifty million of them would not like what is being done in their name with their money.

And the judge decides who gets paid. This judge was very excited about getting to stop being a judge and start being a grant administrator with a big pot of philanthropy. We said, why are these unrelated organizations, which are not even unrelated, they are affiliated with class counsel, getting the class’s money? If the plaintiffs’ lawyers want to support the ACLU, it should come out of their pockets and not the class’s pockets. It is perfectly feasible to distribute that money to the class. Much smaller settlements get distributed to similar class sizes all the time. You can complain that if you divided it evenly among every single class member it would be a tiny amount and not worth paying out, but you do not have to do it that way, and most class actions are not done that way. Most class actions settle for less than a dollar per class member. You create a claims process, let class members sign up if they want the money, and divide it that way."

I'm noticing that many establishments are charging you more when you pay by credit or debit cards.

Finally

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I think it’s a good idea .wonderful