Credit/Debit Processing Networks

Personally, I'd happily trade higher rewards for lower interchange fees, since it's more equitable. (From my understanding, this is basically how it is in Europe, where the fees networks can charge are capped much lower than here.) But I don't think that would be the result of this bill, if it passes. Just like with what happened when similar legislation was enacted for debit cards, probably most merchants would keep charging the same for their goods and pocket the difference, rather than passing the savings on to consumers. Really, this is just a fight between merchants and networks for who gets this slice of the profit from transactions. You can see it in the lobbying and campaigning behind the bill, which has basically just been a tug-of-war between merchants on the one side and networks and issuers on the other, both claiming they're championing what's best for the consumer.

Slabenstein wrote: ↑Thu Jul 27, 2023 4:07 pm Personally, I'd happily trade higher rewards for lower interchange fees, since it's more equitable.

FedNow just went live this month with a cost of 4.5 cents per transaction to transfer funds instantly, 24/7/365. Bye bye stupid ACH ridiculousness, but it's going to take a few years for a majority of banks to get onboard. There are incentives for the banks to do so that they aren't ignoring - it's just a tech issue now. That's a service of the Federal Reserve, of course, and the reason why Venmo/Stripe/etc. valuations are down so much. They're walking dead now unless they get into granting credit somehow. For example, individuals can instantly receive their paychecks and use them the same day, and small businesses can more efficiently manage cash flows without processing delays. Over the coming years, customers of banks and credit unions that sign up for the service should be able to use their financial institution’s mobile app, website, and other interfaces to send instant payments quickly and securely. https://www.frbservices.org/news/press- ... nouncement

Slabenstein wrote: ↑Thu Jul 27, 2023 4:07 pm Personally, I'd happily trade higher rewards for lower interchange fees, since it's more equitable. (From my understanding, this is basically how it is in Europe, where the fees networks can charge are capped much lower than here.) But I don't think that would be the result of this bill, if it passes. Just like with what happened when similar legislation was enacted for debit cards, probably most merchants would keep charging the same for their goods and pocket the difference, rather than passing the savings on to consumers. Really, this is just a fight between merchants and networks for who gets this slice of the profit from transactions. You can see it in the lobbying and campaigning behind the bill, which has basically just been a tug-of-war between merchants on the one side and networks and issuers on the other, both claiming they're championing what's best for the consumer.

Neither merchants nor networks and issuers have the consumer's cost as a driver. I wish I remember which site it was (points guy or whomever) that said this is a great way for politicians to solicit campaign donations. Pit two opposing stakeholders against each other on something that will be difficult to pass (though I won't say impossible) and reap the donations. Almost reminds me of Distinguished Gentleman when Eddie Murphy's character is asked if he's for or against sugar supports and had said you tell me. Lobbyist says: Shit -- makes no difference to me. If you're for 'em, I got money for you from my sugar producers in Louisiana and Hawaii. If you're against 'em, I got money for you from the candy manufacturers.

Saeren wrote: ↑Tue Jul 25, 2023 5:16 pm There's no way that the banks will let this happen. They will do more lobbying than we could ever possibly do, both to protect their processing revenue streams, and to not lose a bunch of customers with excellent credit who go for the rewards cards.

Single or 2-page flyers have started showing up in Kansas, attacking one of the state's Republican senators that co-sponsored the bill. They call him a "conservative" - in quotes, like he's a fake or plant or something. One of the flyers calls out Target (italics and underlines exactly as in the flyer): "Target hates conservatives. But Marshall's bill gives them billions - paid for by YOUR rewards points. And your financial data could be processed by partners of the Chinese Communist Party." LOL I mean, it's hilarious on one side, for so many reasons, including that they would never, ever spout stuff like this in a room with smart donors - they'd get laughed at, of course. But it will work to get people voting and calling Marshall's office saying they're against the entire bill. Because Target Rainbows are keeping diesel prices high and raising the price on every single consumer item shipped by truck! That's the sad side of it all. Note that the flyers do not call out Walmart, because that's blasphemy in Kansas. Even though Walmart and Target both signed up early on in support of the bill, hoping to reduce their own interchange fee expenditures. I read a few articles that point to a dark-money PAC that is funding this. Speculation is that it's MC/VISA directly and/or some investment group on Wall Street.

Well jokes on them everyone knows Kansas voters read about as well as California politicians do math or their voters do accountability. As long as Marshall has that (R) at the end of his name he is safe. Sides if the dems have their way they are going to keep printing money til those Kansas voters are back to bartering and then telling them it is for their benefit the greater good. They are already trying on how the public will react to it. https://fortune.com/2023/08/05/fed-inte ... rkets/amp/

Beefy wrote: ↑Wed Aug 09, 2023 10:25 pm As long as Marshall has that (R) at the end of his name he is safe.

I think he'll just make the case to Wall Street that what the bill calls for is inevitable, and he can be there to water it down. No matter what, all businesses large and small are going to pocket the difference between the current card processing fees and any future lower costs that this bill might provide. Personally, I don't see the problem with a little competition in this space, but that's probably due in part to the fact I don't have to worry about my monthly ExecuJet bill.

Cassie wrote: ↑Thu Aug 10, 2023 6:20 am

Beefy wrote: ↑Wed Aug 09, 2023 10:25 pm As long as Marshall has that (R) at the end of his name he is safe.

I think he'll just make the case to Wall Street that what the bill calls for is inevitable, and he can be there to water it down. No matter what, all businesses large and small are going to pocket the difference between the current card processing fees and any future lower costs that this bill might provide. Personally, I don't see the problem with a little competition in this space, but that's probably due in part to the fact I don't have to worry about my monthly ExecuJet bill.

Oh I agree the consumer won’t be getting a benefit from this, and rewards programs are likely to take on a look similar to that seen in Australia and Europe with absolute crap cards, that have annual fees and only the absolute highest AF cards having anything remotely similar to US rewards programs today.

In another post or the outside world, I ran across an article very recently that said several countries were looking at removing the dollar as the international monetary standard and move to utilizing another money (not sure what it was?). Would be a blow to the US if China or Russia's money became the standard. We are rapidly losing world power and some countries are trying to call our bluff (talk is cheap). We have used our win (if you will) in World War II as an intimidator, but words do not always speak when the use of nuclear power is threated. As a Veteran of Foreign wars, many Americans seem to not want to jump off the cliff without a bungee cord. Global Climate Change would be a non-issue after such a war (nuclear) as such. Peace is good but many countries really have a very subsistence standard of living and high populations so if people die ... so be it. Will add after reading the postings in this thread and off shoots, it is NOT possible to provide a perfect solution(s) for the US and the world as there are so many facets to monetary policy. Don't forget corruption in some countries which affects their lifestyles. We cannot save everyone. As was stated, it would fall on those least able to fund our happenings (or afford it) as the political arena is not going to go after the rich (who funds their campaigns). It was mentioned about 20% in one place ... I cover many years and remember back when you could get a home mortgage for only 17.5%. WOW was that a deal (back in the 1970s). Certainly agree, it can be frustrating figuring a way out. Will add that our governmental elected leadership is at an all-time low. Time for a major change at the congressional level!!! We need to see younger people in power. The Baby Boomers have had their run and it is time ... Many of us are using walkers and tripping over sandbags at the podium! May even need respirators! No, I am not being kind ... we need youth!!! No more passing out while delivering a speech? Well, that is my rant for the day Ps Trying hard not to be political but that is a big factor in this thread?

Dinosaur wrote: ↑Fri Aug 11, 2023 8:20 am Well, that is my rant for the day Ps Trying hard not to be political but that is a big factor in this thread?

Everything is political these days, it seems. There's no red state vs blue state, either - it's very clearly rural vs. urban, and both regions have their own, unique cult-like behaviors. Until 'family values' gets put at the top of the pyramid with 'corporate profits' at the bottom, it's all lies no matter who is doing the talking. I mean, what the hell are we all working for/toward, anyway? Totally agree with you on the age thing, too. I think 70 is a good limit. Oh I just went on a rant didn't I? I'm actually quite passive in general.