Comments on: The stranglehold of payments networks http://blogs.reuters.com/felix-salmon/2012/03/29/the-stranglehold-of-payments-networks/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: me315b http://blogs.reuters.com/felix-salmon/2012/03/29/the-stranglehold-of-payments-networks/comment-page-1/#comment-37535 Tue, 03 Apr 2012 16:09:39 +0000 http://blogs.reuters.com/felix-salmon/?p=12850#comment-37535 I’m a PayAnywhere user. Their device plugs right into your phone and their app has easy to use features. I would definitely recommend it to anyone with a small business or salesmen on the go! http://www.payanywhere.com/home

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By: Setty http://blogs.reuters.com/felix-salmon/2012/03/29/the-stranglehold-of-payments-networks/comment-page-1/#comment-37504 Sun, 01 Apr 2012 07:30:52 +0000 http://blogs.reuters.com/felix-salmon/?p=12850#comment-37504 Moopheus, I hope your paranoia also extends to the check-clearing system, which is already run by the Fed. Do you really think that your check details are susceptible to FOIA requests? And do you really think the Fed is less trustworthy than Visa or Mastercard?

Also, the Fed won’t track every penny I spend, as I live in Chile. What I’d like is a way to send money to vendors, friends and family in the USA without the expense of wire transfers or PayPal and without making other people have to jump through the hoops imposed by bank systems like Chase QuickPay. It’s really silly that anyone can do a free interbank transfer in Venezuela and Chile and it’s still impossible in the USA. Faced with that market failure, I’m all for a quasi-government agency like the Fed stepping in and taking over the task.

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By: CaycePollard http://blogs.reuters.com/felix-salmon/2012/03/29/the-stranglehold-of-payments-networks/comment-page-1/#comment-37499 Sat, 31 Mar 2012 17:16:01 +0000 http://blogs.reuters.com/felix-salmon/?p=12850#comment-37499 That’s a good point. What did happen to ClearXChange? In the UK they have Faster Payment Service (FPS) so you can send money from bank account to another instantly and its free for consumers. Why is that so hard in the US?

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By: M.C.McBride http://blogs.reuters.com/felix-salmon/2012/03/29/the-stranglehold-of-payments-networks/comment-page-1/#comment-37485 Fri, 30 Mar 2012 19:35:06 +0000 http://blogs.reuters.com/felix-salmon/?p=12850#comment-37485 The article was excellent and as were the comments.

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By: datascientist http://blogs.reuters.com/felix-salmon/2012/03/29/the-stranglehold-of-payments-networks/comment-page-1/#comment-37483 Fri, 30 Mar 2012 19:27:59 +0000 http://blogs.reuters.com/felix-salmon/?p=12850#comment-37483 Why don’t leading non-finance companies enter the picture?

In the developing world telecoms have “leapfrogged” financial services firms by creating payment systems that (initially) targeted the unbanked. As these payment & money-transfer systems took off a few things happened: (1) mainstream (i.e., the “banked”) users joined in, (2) merchants started accepting them at point-of-sale, (3) the telecom companies started to add features slowly transforming these simple services into sophisticated financial products. I’ve written about this in a few places, including here:

http://radar.oreilly.com/2009/09/mobile- banks-in-the-developing-world-prove-simp ler-is-better.html

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By: Moopheus http://blogs.reuters.com/felix-salmon/2012/03/29/the-stranglehold-of-payments-networks/comment-page-1/#comment-37481 Fri, 30 Mar 2012 18:31:12 +0000 http://blogs.reuters.com/felix-salmon/?p=12850#comment-37481 Realist50–I wouldn’t assume that the 5% discount is greater than the cost of interchange. For one thing, cards that offer benefits to the customer–cash back, points, etc.–cost more for the merchant. The banks make the merchants pay for that. I was talking with one local businessperson (my bike mechanic) who told me her fees can go as high as 6% on those cards.

I pay her in cash.

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By: jimmyzane http://blogs.reuters.com/felix-salmon/2012/03/29/the-stranglehold-of-payments-networks/comment-page-1/#comment-37480 Fri, 30 Mar 2012 18:24:56 +0000 http://blogs.reuters.com/felix-salmon/?p=12850#comment-37480 clearXchange = ACH. Cheap.

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By: realist50 http://blogs.reuters.com/felix-salmon/2012/03/29/the-stranglehold-of-payments-networks/comment-page-1/#comment-37479 Fri, 30 Mar 2012 18:14:09 +0000 http://blogs.reuters.com/felix-salmon/?p=12850#comment-37479 Moopheus – I don’t question that merchants, big or small, would rather pay less interchange than more interchange. Clearly they’d rather pay less for the same service and availability of payment options. I was addressing whether a merchant would rather pay current interchange rates or deal with cash/checks. I could see a difference between mom and pop local merchants and larger chain retailers on this point. If I’m a local mom and pop, I’ll assume that I have a limited risk of employee theft (if me or a close relative is always minding the till) and may look at the handling costs of cash as “I go to the bank every day whether my cash receipts are $x or $5x” I also may, as naiveideas pointed out, not report all of my cash for sales tax or income tax (I don’t mean to say that’s true in every case, but it certainly happens sometimes). All of these dynamics are different for a large retail chain.

For what it’s worth, a sizable liquor store chain here in Texas (Spec’s) is an interesting example, as Spec’s offers a 5% “cash discount”, which is prominently displayed on every price label in store. For their purposes, PIN-based debit also counts as “cash” (I’m not sure of their policy on checks). I don’t know the origins of this discount, or if regulations specific to liquor stores had anything to do with the policy at some point in time, but it’s interesting since the discount is obviously greater than the cost of interchange.

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By: Moopheus http://blogs.reuters.com/felix-salmon/2012/03/29/the-stranglehold-of-payments-networks/comment-page-1/#comment-37477 Fri, 30 Mar 2012 13:32:54 +0000 http://blogs.reuters.com/felix-salmon/?p=12850#comment-37477 Apparently it is too early in the morning to type “merchants” correctly.

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By: Moopheus http://blogs.reuters.com/felix-salmon/2012/03/29/the-stranglehold-of-payments-networks/comment-page-1/#comment-37476 Fri, 30 Mar 2012 13:31:56 +0000 http://blogs.reuters.com/felix-salmon/?p=12850#comment-37476 Realist50–while it’s true that checks and cash are not perfect from the merhcants’ point of view, it’s also true that merchants feel that the interchange fees are too high, to the extent that I have seen more and more local merchants *asking customers to pay cash* rather than use plastic. And when the interchange fees were being fought over in Congress, which side were the merchants on–even the big boys, Walmart, Target, etc.? Merhcants want the fees to come down, and I agree that making them visible would make it an issue that consumers would pay attention to. Heck, in today’s political rhetoric, you could even get away with calling it a “tax”!

Setty–do you really want a payment system where the Fed can track every nickel you spend on anything? Where that information could conceivably be considered a public record subject to FOIA (at some expense, I suppose)?

Felix–Why would ClearXchange be an improvement? A system where Visa and Mastercard have oligopoly pricing power is exchanged for one where Wells Fargo and BofA have that power? Given all that we know of Wells Fargo and BofA’s scrupulously honest and thorough business practices, that doesn’t seem like a great idea (see also: frying pan, fire).

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