Comment by shpx
16 hours ago
It's surprising that Visa and Mastercard are even private companies. I expected that the government would be in charge of money and not let a group of people impose a 1-3% tax on their population. In the US, credit cards account for "71% of nationwide retail sales dollars".
Governments aren't competent enough to do tech stuff well and they would never make something that works in a different country as well as credit cards do, but still.
It is not only "their" population. Mastercard and Visa captures a % of each sale done globally with their cards. It is perfectly reasonable for all countries to want to develop their own payment systems and stop paying taxes to the USA.
> It's surprising that Visa and Mastercard are even private companies.
Asianometry provides a great summary as to how both of them came to be: For Visa, a 1976 rebranding of the BankAmericard program. For Mastercard, a 1966 meeting of banks as opposition to BankAmericard.
https://www.youtube.com/watch?v=k2rKS4l6MAk
> a group of people impose a 1-3% tax on their population.
It seems the consensus is that a taxes are only bad if you have to pay the government. If it's a small set of companies that collectively own a virtual monopoly, it's because they earned it.
Competition is for losers. - Peter Thiel
The US already has a competing payment system for benefits (EBT cards), as do many other countries.
Payments themselves are not a technical challenge, no matter who's doing it. The fundamentals are trivial. You move numbers between accounts.
It's tackling fraud and dealing with disputes that's a challenge.
The hardest part is network effects.
Consider that the largest payment card network on Earth (China UnionPay, 7 billion cards) - decided it was easier just to bootstrap acceptance in the US by a partnership with Discover rather than connecting directly to merchants.
If you want a new scheme to work, distribute something like social security and welfare cheques through it. That immediately forces broad acceptance.
Isn't US EBT card on the same payment network as credit cards? That doesn't count as an independent system. The same set of "they" as Visa/Mastercard gets the fee.
Most countries have some kind of bank wire system that is in charge of the money itself. Cards are pre-authorization system. The movement of money is authorized when you swipe the card, but not actually moved until up to a few days later, through the existing bank wire systems. If there's a currency conversion involved it can be even trickier.
The US is controlled by finance capital, the elections are just to choose it's spokesperson.
Banks are private companies. The Federal Reserve is partially private.