Comment by hnfong
17 days ago
Even putting aside issue of geopolitics, it's quite baffling to me that every country besides China and Russia are paying ~0.2% "sales tax" to corporate America.
17 days ago
Even putting aside issue of geopolitics, it's quite baffling to me that every country besides China and Russia are paying ~0.2% "sales tax" to corporate America.
Not 0.2%
Visa: 1.3% to 2.3% Mastercard: 1.5% to 2.6% Mastercard: 2.3% to 3.5%
Nothing precise as it depends on whether that's debit vs credit cards, and the type of card. Also volume related and what the bank may subsidize, or take on top.
The payment processing rates offered vary by country. It rarely goes above 1% in Germany unless you're really not shopping around or are really low volume.
A % of that also goes to the issuing bank*, not to MC/Visa, so I suspect the mentioned 0.2% is talking about what MC/Visa has as their cut.
*: That's also how banks can profitably offer things like cashback.
Depends if we are talking credit or debt cards
The low fees are for debt and high for credit cards and VISA/MC won't allow you to accebt only the debt cards
2 replies →
This is incorrect.
Visa's processes ~$14T in transactions. At 0.2% thats roughly ~$28B in revenue (VISA posted ~$40B in revenue in 2025) versus 2% is $280B in revenue.
EDIT: The 2~3% you're talking is the payment processor fees which get divvy'd out to acquiring processors, acquiring banks, gateways, merchant processing, etc. etc.
Not in EU.
https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
> Specifically, the regulation:
> caps interchange fees at 0.2% of the transaction value for consumer debit cards and at 0.3% for consumer credit cards;
Visa and MC were capped at 0.5% for the network before that change went in as well. But we have no idea what actual rates were beside the cap as they were negotiated with each card issuer based on their risk profile and customer base.
Key term in that sentence is consumer. As in that's not the cap for businesses.
You need to look at both sides of the transaction to figure out the total.
1 reply →
These regulations were the reason that American Express pulled out of various European markets (but not all) as it became less/not profitable for them to issue their cards in those markets.
3 replies →
The amount going to Visa/MC is 0.1-0.13%. The vast majority of CC interchange fees go to the issuing banks, not Visa/MC.
No every, you just don't know it ;)
There was a recent case of one Serbian company being sanctioned by the USA, and Visa and Master refused to process payments. No big deal, since even a small country like Serbia has its payment system called Dina that kept the company afloat.
There's not a single technical reason for bigger and richer countries to develop their own card payment system. It's not rocket science. The only reason they didn't is their regulators wanted a dependency on the USA payment processors.
France has CB. Germany has girocard. The entire problem is that these are national and not interoperable across the EU.
I don't know for France, but in Germany, they did everything they could to reduce Girocard usage. Today, every bank offers Visa debit, but if you want Girocard, it's difficult to find a bank that offers it.
There's nothing wrong with having national cards, since >90% of transactions are national anyway. That's how German Girocard worked for decades until the coordinated push to switch to Visa Debit happened.
And the government did nothing to protect domestic payment systems. As if they value foreign dependency more than the independence.
1 reply →
This. And don't forget that most businesses have in their payment processing contract terms (set forth by Visa/MC ) that prevent the business from directly charging card users the card processing fees. Which means that everybody - even cash users - pay for those fees. What a racket.
I think this is one of the biggest issues here, that the EU is actually forbidding to charge credit card users the transaction fee. On the contrary, it should make it mandatory that card users have to pay the transaction fees themselves. This would automatically force card providers to reduce their fees, because nobody wants to use cards with high fees. It would also get rid of nonsensical cash-back systems.
The EU also regulated the fee to be very low, something like 0.1% of the transaction value, comparable to the implicit costs of handling cash. If it was America–style 5% then it would be a problem, but at 0.1% it's not.
The official Apple store (McShark) in Vienna used to pass this ~3% charge on to consumers (a few years ago, not sure if it's still true today - and also there is a real Apple Store now).
Wow I didn't see that. Usually it's forbidden in the terms of agreement between the merchant and the payment processor to add a surcharge for using the card so everyone else ends up subsidising it.
Vienna/Austria is such a strange place wrt payment right now. Some places are cashless, many are cash only, many are card only above a certain amount. I had one lady running a ramen restaurant accept instant SEPA.
And it's going to be interesting tax wise when they remove the requirement for receipts on transactions under 35 EUR.
There are lots of restaurants in the US these days that charge 3% for use of any credit card. One that I've been even has a sign posted at the entrance about it, that it's legal to do so. Must have gotten a lot of complaints that it was somehow illegal, or perhaps against card processing rules. Because it's one thing to post a sign that says you charge the fee, it's another for that sign to mention the legality of it.
This has broke down in the last 5 years in the Asean region. Now most shops (that still accept cards) charges you 3-5% if you pay with Visa/Mastercard.
I get the Visa card for free from my bank whereas I have to pay for the Girocard (German alternative). Presumably the bank gets a cut of the fee.
Indian banks had already switched to RuPay. Most Indian banks issue RuPay debit and credit cards.
"RuPay" is a hilarious name for an Indian payment service. Kudos to whoever thought of that name
Rupee payment?
Its a lot less than that overall. The use of credit cards is just much lower for people in Europe - or at least in the Netherlands.
I only took a credit card for a bit when I went traveling, then canceled it.
Those two countries are also at war, hot and cold respectively, with the powers that be.
One positive aspect to Trump is he makes it desirable to punish/break up with US companies .
japan mostly uses paypay, just saying
the eu should try innovating and building a massive global business. seems to be very difficult for you guys
Electronic debit card was invented in…. Denmark https://en.wikipedia.org/wiki/Dankort
I said "massive global business"