Bitcoin Forum

Visa, Mastercard mull increasing fees for processing transactions: WSJ (https://www.reuters.com/article/us-paymentprocessors-fees/visa-mastercard-mull-increasing-fees-for-processing-transactions-wsj-idUSKCN1Q41ME)

Visa Inc and Mastercard Inc, the two biggest U.S. card networks, are preparing to raise certain fees levied on U.S. merchants for processing transactions

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They operate as a global duopoly. They operate a large chunk of global trade. They are ubiquitous on internet.  And they decide, without consulting anyone or without any justification, to increase their fee.

This is what centralized organizations will always make if they have the power to do. We need alternative means of payment to reduce that power and Bitcoin has to show itself as an alternative.

Visa and MasterCard are some of the most prominent and famous card network around the world and there is no doubt they operate on global basis and can increase the tx fees as per there requirements or needs.


As you can see the wall street journal (WSJ) said.

From this we can judge there tremendous amount of profits from sales and usage of there services. And yes it can be said as a global duopoly for sure.

This centralized economic power on global level can be decentralized by just avoiding such types of services which operate under high personal benefits for small transaction work and using a clear and free from authority, type of economic service which is Bitcoin. There are very high possible number of benefits Bitcoin could bring to this centralized transaction services.

I completely agree on your thoughts.
The Visa and MasterCards company are really annoying its users completely. They are not stopping in to do so in any expects.
They keep on Increasing the fees as much they are capable of and we normal users are facing a lot of issues for that.
So we definitely need any alternate way of Payment at the moment.
It's time for Bitcoin now to show its Power.

This is quite expected since these companies are not owned by the people they are serving so they can decide on anything anytime on whatever direction they are going with. Yes, this is one disadvantage of a centralized system but this also means that as a centralized entity it can decide on anything fast and more efficient compared to a decentralized organization. One thing I learn in life is that on anything there will be advantages and disadvantages. Of course, there can be a better way but until such time that the best options or alternatives are not yet utilized by the mainstream population then we can do nothing but just voice our complaints and displeasure especially if we are imposed with more fees on transactions. The challenge for Bitcoin or the whole cryptocurrency market is to make things better and more adoptive to the people's needs and desires so that more and more people can be riding this bandwagon.

i want to raise a question regarding this, do you think it is a good thing for bitcoin?

them increasing fees they take from merchant to process their transactions means merchants have to increase their prices to cover the difference if they don't want to lose money or eat into their profit.

on the other hand using bitcoin doesn't have that fee. so if they get paid in bitcoin they can offer their goods at a "discount" and that can create incentive for people to make payment in bitcoin hence increasing adoption.

This is undoubtedly a very interesting way of looking at this situation. For the adoption of Bitcoin, it would be much better if it were seen as a cheaper alternative.

A credit card, for a merchant, does not just have only the cost of that Fee. Usually, it takes a long time for him to receive the money. It can be 10 days up to 30 days. So, it would make more sense for some merchant to start making a discount available to Bitcoin users.

As the need for electronic transfer emerged people began to use debit cards and credit cards that were provided by the financial service providers. Right now the same is used as an opportunity to make an added profiting by increasing the transaction fee. By this time bitcoin and the need for Cryptocurrencies need to be taught to the consumers which might gain attention from public who rely completely on visa and mastercards for every transaction.

It is hard to break their dominance and they have the power and money to control and influence any government or organizations, but i am not sure what fees they are planning to increase, either way it will be a burden for the end user, merchant banks could absorb some fees but lets see how this goes, bitcoin as a payment will change everything without a doubt, but we need more development in that aspect as i cannot name one company in this space that provide bitcoin based debit card, eventually it will happen and break every monopoly.

It is some promising news for crypto i think. They are asking "Up to 2.5 percent of prices for goods and services go to cover card fees" and less than 1/10 of that can be done with some of the new blockchains (bitcoin and ethereum blockchains can't process that many transactions).
"

Don't like the fees? Don't like the monopoly? Pay cash!

This are  the reason why all this financial entities  are  fight again bitcoin because  MasterCard  & Visa believes bitcoin is big threat to business,  Satoshi Vision is stop all this high transaction fees . as Blockchain technology is  growing i know very soon we will get  Card purposely for crypto  transaction only this is satoshi vision .  MasterCard and Visa are are monopoly so they will always treat customer anymore  by charging us any fees..

Nope this is definitely not the best solution, because millions of transactions are done online with credit cards and these transactions cannot not be done with cash, because these merchants are spread all over the world.  :P Cash withdrawal is also very expensive, because Banks are trying to push people not to use cash anymore, so the fees for credit card transactions and cash withdrawal fees will be more or less the same.  >:(

The best solution is for us to motive people <Merchants & Customers> to shift to Bitcoin as a alternative payment option.  8)

a "duopoly" is overstating things a bit. amex actually does higher volume than mastercard (definitely less cardholders though). visa is really in a league of its own.

if visa/mastercard jack up rates at the same time, are there possibly antitrust issues re price fixing?


with bitcoin, other people joining the network and taking up block space will drive your fees up. is that much better than visa? :)

Don't say there is nothing we can do when actually we can do something. Their customers or we'll Stop using their services. I don't know of the US but we have alternative card Network provides in my country and again we have bitcoin and altcoins so I won't say we're totally hopeless

It's too bad that merchants socialize the costs induced by credit card users. When I walk into a store, I get the same price whether I pay with cash or credit card. Why would I use cash when I can get cash back rewards for using credit cards? Plus, credit cards give me insurance against dishonorable merchants. I can reverse the payment if needed.

If merchants offered me lower prices to use cash, I'd consider it.

There is nothing we can do about the card companies increasing their rates
and the general public (a) wont be aware of it and (b) wont care too much.

If people in general do notice and care are they going to move to bitcoin?
im not sure, there is unfortunately only certain things that are available when
using bitcoin. Groceries, fuel and utility bills are not widespread accepting
bitcoin.

Thats so true, cant blame the merchant for increasing the price, every increase or decrease of price with the product they're selling has its corresponding reasons. Its either the customer will suffer or the merchant in the first place.

Yes, they want to get all they can before they are into the play. Now since they assumed it`s all finished they don`t care about the customers anymore as they will losse them all soon anyway. So they will try to get the max of what they could.

is this real? wow i think they increasing the fee, many people dont want to use the debitcard every day, and i thin they will find the alternative with other platform and other currency, and we all hope that bitcoin can change the via and mastercard position

https://www.paymentscardsandmobile.com/wp-content/uploads/2017/05/Purchase-transactions-on-global-card-networks-2016-1.jpg

"Visa cards generated 54.06% of all purchase transactions on general purpose cards worldwide. Debit cards with the Visa brand continued to account for the most purchase transactions with a share of 34.82%, followed by Visa credit cards with 19.23%.

Mastercard debit cards had a 13.30% share, overtaking Mastercard credit cards with a 12.87% share. UnionPay credit cards had a 7.59% share, and UnionPay debit cards had a 7.32% share. American Express had a 2.81% share, followed by JCB cards with 1.15% and Diners Club/Discover cards with 0.91%".

https://www.paymentscardsandmobile.com/wp-content/uploads/2017/05/Purchase-transactions-on-global-card-networks-2016-1.jpg

UnionPay only works in China. So I think it is possible to say Visa and MasterCard work like a duopoly. I think there is no place in the world that accept credit cards but do not accept Visa or Mastercard.


People are using more "tap to pay" cards. Bitcoin wallets and mostly cryptocurrencies wallets have this feature almost as a default.

It will be not easy for Bitcoin to overcome Visa or Mastercard's services! Because bitcoin is a volatile currency, people will not rely on its present price. Normal people will not accept the downtrend of the crypto market, they can be panic for it. To make bitcoin as the alternative payment way, BTC price should be stable for at least one year to show the world that BTC can be the first choice to make transactions in every sector!

I don't think digital money can seriously compete with Fiat money. Visa and MasterCard are very serious companies and the use of bitcoin will not change this situation. I think that cryptocurrency will exist as an alternative payment method, but it is too early to say that it will be used as widely as all centralized systems.

There's a lot you can do. One of those things is not using credit cards. I do it very rarely. I have a bank account and I shop online but I pay directly from my account not with my card number. I don't even own a credit card because I didn't want to pay fees. The ones who will suffer are the merchants because they have to allow their clients to use credit cards and they have active terminals in stores. Maybe if less people used credit cards the fees would decrease.

People living from paycheck to paycheck don't have much of an option but to keep using credit cards to fill up gaps during the month. Millions and millions of people are stuck in a life of debt.

Regarding the increase in fees, it's something I saw coming with how there hasn't been much competition in that part of the industry. Less competition and large overall market dominance allow you to do these things.

Switching to Bitcoin isn't a viable option currently with how the price keeps fluctuating. Stability and more global acceptance is needed to convince people to at least give Bitcoin a fair shot.

But still, with the aforementioned in mind, people still rely on debt, and Bitcoin isn't the right tool to help them improve their financial situation. You have to take care of the underlying problem before you can move on.

This is very annoying. But if they increase the fee it will be a good news for crypto useres because If cryptocurrency can show it's power people will start using crypto as a payment method because of low fee and instant transection.

UnionPay is definitely expanding beyond China. Where I live in the US, it's becoming common to see their logo everywhere Visa/Mastercard is posted. I don't think UnionPay cards are being issued to US customers, so the Chinese tourist/expat market must be huge.

I wish I knew more about antitrust laws. I have no idea if they apply here.

Since they are dominating and they know they have the market, its something you can predict that they'll use that advantage to increase its profit by increasing the transaction fee. It'll be hard for the consumer so it will be better if they find alternative one. And then there's bitcoin. But I don't think that most people would think bitcoin as their alternative.

I am with you on this matter. Lack of competition leads to bold unfair moves, because there's nobody around to make them stop. It should be noted, however, that from the article it is unclear who will have to pay the fees:
I hope the banks will take the fees, because they are already getting rich and making people pay regular fees to be cardholders. It's sad though that the banks can pass the fees over to merchants and they can pass them to their customers... That's another example of why centralization is bad. We see the hierarchy, and the ones on the lowest level of it are the most vulnerable.

They already have the popularity and customer base all over the world. Its what people make use every day, minute and seconds. So because of this they can decide to do what they like at anytime. This is the disadvantage of centralized systems which give power to only the creators and owners.  This is why there is need for decentralized systems to be adopted so that everyone can be free to do what they like at any point in time and also there won't be any manipulation or monopoly systems.

Being decentralised the cryptocurrencies have a lot of benefits which can make them a best currency to bring into consideration but yet most of the governments would not make this happen. Our globe is centralised and making it decentralised is not that easy. To avoid the heavy charges with visa/mastercard, we should start adopting cryptocurrencies.

I hope that more merchants start to realize that they are being ripped of by this duopoly. The lightning network could be a nice alternative. It provides instant transactions with negligible fees, meaning that merchants will have a 2.5% improvement on revenue. It will be very though to adopt this in our society but definitely not impossible. We need some multinational corporations to adopt it into their system and then the rest will follow.

do you know the funny part.

banks hold the money. but its VISA/Mastercard demanding banks pay more..
maybe banks should just swap out visa/mastercard for a different service provider.

in the end its all about chargeback scamming and the costs involved. however by linking a card to things like applepay,square, stripe,

EG (how things evolved)
bank (bank is liable for charges)
bank <> debit card (debit card is liable for charges)
bank <> debit card <> phone app service (app service is liable for charges)

thus applepay(+others) handle the chargebacks.. meaning visa/mastercard dont. meaning end bank dont. meaning its just going to push people to prefer to link to things like applepay. to avoid the visa/mastercard excess charge by avoiding making visa/mastrcard liable.

this is what visa/mastercard want anyways. to push the risk off their shoulders for those that use an app as the risk taker, making visa/mastercard. just a zero risk middle service(pure profit)

but
eventually applepay(+others) when they start becoming more of the defacto payment method of fiat, and start to see their exposure to chargeback scamming increase. they too will start increasing their fee's to counter their liabilities

Well, hopefully, it will happen. If we will let blockchain to wreck this duopoly then blockchain will be the best alternative for card networks.
I think they are trying to raise the fees because the government is also asking some for them since they already own the market because of the duopoly. Well, this is very interesting if blockchain will get inside the card network industry and improve the fintech of the world.

Not really.
Most of the population never used and will never use crypto of any kind. Even we, crypto users, usually are ending up with crypto - fiat conversion and paying with Visa/MC.
Nobody (big) retail will waste it times to make a special discounts for the tiny crypto population. Time is money.

Seeing this post got me thinking. This really reinforces the reasoning behind financial institutions strongly kicking against blockchain technology and cryptocurrencies at large. The decentralized nature of the technology would not be able to feed their greed. You almost cannot expect better from centralized financial platforms as they simply portray the illusion that they truly care about their customers when all that concerns them is the size of their pockets. These type of institutions have grown to gain widespread popularity to the point where they believe people cannot do without. That is where the decentralized ecosystem comes in. But before the system is in full flow, we just have to make for with what we have.

Unfortunately, yes, I have to agree here. I hate the very idea of credit (and the impossible fees levied on credit) but myself, when I had access to credit, was forced many times to use it, usually through credit cards.

Coming from my part of the world too, if buying or paying for something in a country halfway across the world where the euro or even dollar or pound means my max debit card payment wasn't even enough to buy a plane ticket, and there's no option to pay with wire, the only way to pay for some of these things conveniently is Visa/MC.

As problematic as credit is, it's also made some day to day things possible. And people literally have no choice if they want to continue life normally.

The system needs fixing first.

not exactly bitcoin discussion related
but you got a point, huge corporations, especially monopolists like Mastercard and Visa
and yeah , i'm sure they are run by  one and same group of people just trying to avoid monoplism accusations
can do whatever they want, raise fees, turn your processing off , even threaten to exclude countries from their systems
as it has been discussed in regards of Russia and sanctions against it
my hope that one day cryptocurrencies will mature enough and have an infrastructure to challenge the supremacy of Visa and Mastercard in transactions processing

that is the centralized systems for you! they force anything they want on their users and the only thing their users can do is to complain but suck it up and continue being their slaves. this is why bitcoin and decentralization has been invented so that we don't have to remain their slaves and have that additional option of freedom if we choose to use it. that is also why we keep fighting to keep bitcoin decentralized because nobody wants to see it turned into another VISA,...

At the moment it is free to own and use a credit card if you pay the bills on time. Soon a well established company will allow bitcoin or litecoin transactions on card to compete with visa

the whole point of bitcoin is that you no longer need a centralized company to take control of your money and then allow you to use your own money (or not if they decided to block you!). in other words bitcoin does not need a card.

with that said bitcoin debit cards are already a similar thing!

I'd say this is pretty great news, this gives merchants and customers even more incentive to switch over to cryptocurrency payments.
Businesses should really put this into the spotlight by giving discounts for payments with cryptocurrency.

They save on transaction fees and customers benefit from being able to buy at a discount. Win Win.

As you can see the wall street journal (WSJ) said.

If 2.5% percent of  goods prices go to cover the card fees then why these companies do not give discount on cash payment. Bitcoin can be good option as a payment but only problem I see which user in the store (or not in the store) will be entrusted with the private key by these corporations?

This is quite obvious and expected from a centralized organization. Although they give a justification of the thing they do, they eventually do what they want.
There will definitely be a reason for an increase in the transaction fees because if they increase the transaction fee without any reason then the public would decrease the usage of their cards.
Centralized organizations basically rule the world with their dominance while decentralized platforms are still lacking support.
Don't know when things will turn and the world will change.

Has anyone suggested that this is a move towards the collapsing of the current debt economies. If you are in debt to the credit card companies, you are forced to maintain your relationship with them. They know that as the debt economy collapses, they will have to start seizing assets ( including houses ), and they are going to have to cover the extra costs. It will be interesting to see how they manage to include credit in the new fake crypto services they will be introducing.

And to my knowledge there is quite a number of people who have substantial debt on credit cards, at least in my countries. For many credit card limits looked more afordable to some people than the classic bank loans but they didn't realise it's actually a trap. Once your in, it's very hard to get out and credit card providers will make huge profit on them, this way or another.
As far as services related to cryptocurrencies are involved, I think that Visa and Mastercard should spread they offers in order to maintain and spread the business.

I'm afraid that they won't allow for something to change in current currency system. As you said those organizations are powerful. Have enough power to prevent that kind of event. To big stake is in the game.

They monopolize this kind of service since they are big enough to control the prices, its hard if they will prevent the mass adoption about cryptocurrency. Now, we have more reason to fight for the legalization of cryptocurrency so we can enjoy good system in the future.

the problem is that merchants don't want to lose money to currency risk. bitcoin could crash at any time. so they turn to payment processors, but a company like bitpay charges only slightly less than visa does! offering a discount on top of that doesn't sound attractive for merchants.

if the bitcoin economy were self-sustaining and merchants could pay their suppliers in bitcoin, this wouldn't be as much of a problem. but right now, merchants need a fast POS solution where they can quickly dump bitcoin for fiat. that doesn't come free.