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Discussion summary

Major banks like JPMorgan and BofA are exploring acquiring card networks to increase debit-card fees. Discussions include concerns over greed, regulation, and the impact on consumers and market competition.

What the discussion says

  • Some see the move as a way for banks to boost profits amid fee increases.
  • Critics argue this could lead to higher costs for consumers.
  • Others believe regulation should prevent excessive fee hikes.
  • There is concern about market dominance and reduced competition.
“Imagine being so greedy you might upset your cash cow and market dominance for a 20% gain.”
— toomuchtodo
“Their articles of incorporation demand maximization, so they will do anything to grow profits.”
— altairprime

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  • Hacker News
  • cancer gonna cancer, amiright
    by cyanydeez
  • Maybe in US, there are countries where these fees are regulated.

    Nonetheless late stage capitalism is nothing but awful.

    by pjmlp
  • Anything but offering pay by bank on cheap FedNow instant payment rails.
    by toomuchtodo
  • Back when I was shopping (2022) for a good secured credit card, I consulted NerdWallet among other sites. I found that Discover Card offered good deals for newbies, as well as some sweet cash-back bonuses.

    Then I found out why the deals were so so good: Discover Card has low acceptance, especially internationally, and this is often because Discover charges relatively high transaction fees. I also learned that Discover, despite its reputation and age, had only one physical branch, in Delaware or something, and so my inner masochist immediately recognized my true financial love.

    I also picked up a Discover Bank checking account, which has even lower acceptance rates, but also offers 1% cash-back if I feel like an adventure.

    Since then, Discover eliminated their sole physical branch location, and their credit card division was also acquired by Capital One, https://m.xkcd.com/2206/

    But I feel like the proliferation now of Apple/Google/Samsung Pay, Zelle, PayPal, Venmo, et al., will stave off any large-scale gouging of consumers through transaction fees.

    by ButlerianJihad
  • Imagine being so greedy you might upset your cash cow and market dominance for a 20% gain. Unreal levels of hubris here.
    by 4d4m
  • Sounds like the law needs to be amended to prevent this. Not just for these "what if" scenarios, but for Capital One who's already in this position.

    If anything, interchange fees should be brought down for credit cards to match those for debit cards. Europe has them capped at rates far lower than the US. With so many people paying with credit cards, retailers have adjusted prices to compensate, which is effectively a consumption tax paid to Visa, Mastercard, and AmEx... even if you don't use a credit card those added fees are still baked into the price. It's only on big ticket items where it's possible to ask for a cash discount, which is usually discounted by whatever interchange fee the store is paying for credit purchases.

    by al_borland

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