Comment by havaloc
17 days ago
I think it's probably a little bit harder than you think with all the rules and regulations out there. I would highly encourage anybody who's remotely interested, listen to the Acquired podcast episode regarding Visa. It's actually quite fascinating how it was started. You may balk at the length, but the whole thing had me interested.
In the Netherlands, before VISA, there already was a national debit card standard called PIN [1]. Sure, times have changed and it's probably not super easy, but it's also not going to be super hard.
[1] https://en.wikipedia.org/wiki/PIN_(debit_card)
Fun fact: until about a year ago it was not possible to pay using normal debit cards in most Dutch shops, you had to have a local card. I distinctly remember that AH, Vomar and Jumbo would typically reject foreign cards while Lidl and Dirk would typically accept them. Of course there were exceptions, but that was the rule of thumb.
Most Dutch people were unaware of the issue (because Dutch cards worked abroad), and those who were, were fully convinced that it's because Dutch system is objectively better (it wasn't, it was just a separate network). Then in like 2024/2025 Visa and Mastercard finally retired their special V-Pay and Maestro brands, and now most terminals in the Netherlands accept most normal cards.
Was V-Pay different from Visa Electron?
I think most people miss that the biggest hurdle is political. Once a political will exists, this system will come to exist.
A card I can tap on a vending machine anywhere in the world. Crypto was probably the hope to compete but that didn't pan out.
India built RuPay, China built UnionPay. There's no reason why Europe can't do the same.
France still has CB https://en.wikipedia.org/wiki/CB_Bank_Card_Group
There are equivalents in several European countries. The problem is that these networks are national and not European, let alone global.
National banking players did not want to give up their turf. The European Union had to twist their arms to get them to agree to SEPA transfers, instant transfers, etc.
If banking players cannot agree, then regulation (or the threat of regulation) must be used.
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CB actually have higher security standards than visa.
I once worked at a company doing payment card personalization (its the company who turn blank smart cards into finalized cards on behalf of banks. They print the customers names, emboss the account number, and program the chip and the magstrip)
Every year they had comprehensive security audits from Visa, Mastercard and Groupe Carte Bleue.
One guy there told me that they did the Groupe Carte Bleue audit first, because its the toughest. If they passed it they were sure to pass the others.
The most obvious difference being that unlike China or India, Europe (or the EU) is not a single country. This doesn't make things impossible but certainly complicates them.
Exactly, now that the internet is ubiquitous, none of the problems with replacing credit card companies like VISA are really technical. They are regulatory, they are political, they are social.
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The sensible thing would be to do it by currency area - e.g. the Eurozone.
Technology and some systems could be shared.
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European countries each have their system. But they do not interoperate. You can't pay with blik in Germany, you can't pay with German debit card in Poland.
As jacekm mentioned already (https://www.blik.com/przelewy-na-telefon-w-euro-z-hiszpanii-...
> with all the rules and regulations out there.
And who wrote those? Aren't they just another part of the moat?
> It's actually quite fascinating how it was started.
Visa was founded in 1958 by Bank of America (BofA) as the BankAmericard credit card program.[1] In response to competitor Master Charge (now Mastercard), BofA began to license the BankAmericard program to other financial institutions in 1966.[8] By 1970, BofA gave up direct control of the BankAmericard program, forming a cooperative with the other various BankAmericard issuer banks to take over its management. It was then renamed Visa in 1976.
The answer is: "Banks."
My takeaway from the episode was that its actually really easy to setup up visa, you just need to get the banks, vendors, and card issuers onboard, which should be easy if you're the government
You still need to make it, but actually making it is a small fraction of the problem, less than half
Sure, it’s hard, but a duopoly is skimming LITERALLY 1-3% off the entire consumer economy for a service that is not that expensive to operate. Additionally, interchange rates are higher for premium credit cards, to pay for the benefits (not to pay for the cost of operating the network.) This cost is shared among all consumers, not just the well-off who can get premium credit cards.
It’s a captive market, which means Visa & MC really don’t have a ton of incentive to compete. How do you get new payment networks to integrate? Banks typically only offer a single network on their cards, and businesses use whatever their PoS systems accept. For a new network to compete, it’d need to be available everywhere.
It’s the textbook definition of core infrastructure for society and frankly should be operated like a utility. It’s not like Visa & MC are innovating - just look at the lethargic rollout of contactless in the US until COVID forced everyone’s hands.
The sole purpose of visa & MC is to grow profit each year. That’s it. I’m not a fan of that being in the middle of practically all consumer spending