Who is Visa / MC / AMEX going to side with? The company that gets them hundreds of millions of dollars in revenue every year or a random account holder? It doesn't really matter who is right or wrong.
This tidily demonstrates the value of a competent regulatory authority. The payment processor (i.e. card provider) should be even more afraid of the regulator than they are of potential lost business.
Would be nice, except that consumer protections were anyways an afterthought in this country and we just elected a government with an explicit goal to kill them entirely.
I agree about the current government. However, we do have examples of muscular regulatory schemes and infrastructure in this country's past: CFPB and Dodd-Frank are recent good examples. Both could also have been stronger, of course.
Visa / MC are also under monpoloy FTC scrutiny. They've kept out all competitors in he usa, supposedly by threating not letting you accept Visa / MC if you accept anyone else. In places like Japan, Korea, China, Taiwan, Thailand, Mayalsia there are tons of competitors. And because of the competition the fees are much lower to try to lure merchants as well bonuses for consumers.
For individual chargebacks and small scammy merchants, sure. Uber meanwhile processes $40 billion worth of transactions a year. There is zero chance they are facing any kind of "discipline" from credit card operators. At that volume they write their own terms.
Going by that theory why doesn't Visa just jack up their prices by 10x? After all what are merchants going to do, not accept Visa? Turns out yes, that's exactly what they will do. Look at the number of business that don't take Amex for example for the same reason. Large companies especially have enough leverage to negotiate their own deals with credit card operators, like Costco does with Visa.
Costco is a bit different. If I don't have a Visa, i can pay with cash, personal check, or debit card. Sure, I'd prefer to pay with credit card, but it's not a huge deal for me to use a debit card there.
With Uber, there simply isn't an alternative. If they don't accept Visa then i can't use a credit card (or most debit cards, since those go through the visa network too) and there isn't a reasonable way for me to pay at all.
> With Uber, there simply isn't an alternative. If they don't accept Visa then i can't use a credit card (or most debit cards, since those go through the visa network too) and there isn't a reasonable way for me to pay at all.
Uber takes Paypal, Venmo, Apple Pay, and Google Pay too. Any would let you use a bank account. You can also deposit cash into PayPal and I think Venmo as well.
> Going by that theory why doesn't Visa just jack up their prices by 10x?
They (in collusion with MasterCard) could jack up prices and then there's be an antitrust case against them.
Here's the thing, though - as long as they don't abuse their duopoly position, those anti-trust cases are weaker. And a policy of preferring to side with the customer in these disputes is not exactly viewed as abuse of the monopoly position.
You are drastically underestimating the value and control that the processor networks bring.
Wells Fargo might underwrite the credit on my credit card, but I would immediately cancel that line of credit if it wasn’t accessible through the Visa network.
The value of a credit card isn’t just the line of credit, it is the near universal and frictionless acceptance as a method of payment.
You're mostly right, but Discover specifically owns a bank. That bank does underwrite the debt on most Discover cards. Also Amex, but you didn't mention them.
CC companies have little choice. Laws in EU give right/priority to the customer, and the burden of proof to the company. Now, imagine pissing 1 million Europeans, and them all going to their banks and file a complaint. And Uber (or any other vendor) be hit by 1 million claims that they have to fight for one-at-a-time.
