We’ve had this in Australia since the 90s. All debit cards are dual network: They support both Visa/Mastercard, as well as the local network (called EFTPOS). EFTPOS is noticeably cheaper to process, and the profits stay in Australia rather than going to a US company.
That’s only for debit cards, though. EFTPOS doesn’t support credit cards.
In Australia, most credit cards have an annual fee, and they pretty much all just offer frequent flyer miles. US cards have much better perks: Quite a few offer 2% cashback, cards with points offer more points than Aussie cards, they almost all include extended warranty and rental car coverage, some include mobile phone protection, etc.
Merchants pay the price for these perks, given the high fees to process credit cards. They can make merchants pay a 3% fee, pay 2% cashback to customers on some of their cards, and still make more money from card fees than they would in other countries. Visa and Mastercard used to require merchants in the US to not charge any extra fees for accepting credit cards, but after a big lawsuit, this is no longer the case. Stores are slowly becoming like Aussie stores - charging extra if you pay by card.
Well, it depends, for people who do a lot of travelling and online shopping they are quite popular all over the world, as an easy way to add one layer of insulation between your own money and businesses you don’t know if you can trust.
Thanks for the info! The only two countries I’m familiar with (in terms of payment processing) are Australia and the US, so I didn’t want to make assumptions about other countries.
We’ve had this in Australia since the 90s. All debit cards are dual network: They support both Visa/Mastercard, as well as the local network (called EFTPOS). EFTPOS is noticeably cheaper to process, and the profits stay in Australia rather than going to a US company.
That’s only for debit cards, though. EFTPOS doesn’t support credit cards.
Does anyone outside the US even use credit cards?
They have far fewer perks, so it’s not as common.
In Australia, most credit cards have an annual fee, and they pretty much all just offer frequent flyer miles. US cards have much better perks: Quite a few offer 2% cashback, cards with points offer more points than Aussie cards, they almost all include extended warranty and rental car coverage, some include mobile phone protection, etc.
Merchants pay the price for these perks, given the high fees to process credit cards. They can make merchants pay a 3% fee, pay 2% cashback to customers on some of their cards, and still make more money from card fees than they would in other countries. Visa and Mastercard used to require merchants in the US to not charge any extra fees for accepting credit cards, but after a big lawsuit, this is no longer the case. Stores are slowly becoming like Aussie stores - charging extra if you pay by card.
Well, it depends, for people who do a lot of travelling and online shopping they are quite popular all over the world, as an easy way to add one layer of insulation between your own money and businesses you don’t know if you can trust.
Same in Norway and I think same in many countries, biggest issue is across borders inside of Europe. Most payments online also.
Thanks for the info! The only two countries I’m familiar with (in terms of payment processing) are Australia and the US, so I didn’t want to make assumptions about other countries.
Same in Canada with Interac. I’d love to see some interop between these types of networks
What Interac is missing is some sort of protection if a number gets stolen, etc. You could lose all the money in the accounts on a card.
Yeah that’s not what we’re talking about here. Debit cards already have their own circuits, like Bancomat here in Italy. This is about credit cards.
Why would it need to be different for credit cards vs debit cards though?