Visa and Mastercard: The global payment duopoly (2024)

> AFAIK some places already have it, like Thailand and Malaysia.

Also Vietnam (Napas247), Singapore (PayNow), Philippines (QR Ph), Japan (lots different systems), China (WeChat/Alipay, I think?), Russia (SBP), Belarus (ERIP, in a sense), and the whole of EU (SEPA transfers).

One problem is, most of them don’t really work for you if you’re a foreigner. Moreta (YC S24) is doing something in SEA, and I’ve seen another service for visitors in India, but I think exchange rates wouldn’t be too good (compared to something like Wise, maybe on par with regular banks though).

https://moretapay.com/, https://ale.sh/r/moreta (affiliate link)

https://wise.com/, https://ale.sh/r/wise (affiliate link)

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants.

This is the entire value proposition of credit cards and is what undergirds the issuer (bank) justification for interest rates assessed. To be able to defer card-holder immediate payment for some period of time and/or to put the onus of proof-of-purchase on the merchant instead of the card holder.

The last point is non-trivial when considering debit or debit-like networks result in funds being transferred during settlement (often performed daily), thus making the customer responsible for proving they did not perform the transaction post hoc.

I am in Thailand. Fraud is a much smaller issue because it’s a push-based system. You cannot withdrawal from someone else’s account just by knowing the number, unlike with credit cards.

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank

It will not take long. Banks are already offering products with credit on top of the Pix. Furthermore, contactless Pix is now available in Android phones. If we look from the financial and usability aspects, Pix will continue eating the credit card market share.

I didn't know Thailand and Malaysia had similar systems, though. I hope the example spreads! Creating a competitive infrastructure and product is an interesting way to deal with monopolies.

Pix, UPI, etc are nationally silo'd and have little risk of spreading around the world. They took over their respective countries because they were government backed and mandatory.

The US has its own version of this: government backed, 24/7 instant settlement payment rails (called FedNow). It released in 2023 but adoption is slow because it's not mandatory. Banks are especially slow to support "Requests for payments", which might compete with card networks for retail purchases.

It's the banks, not Visa / Mastercard, that make the most off credit card fees. Visa / Mastercard take .1-.2%, the bank takes ~2%.

The other unique bit about the US is we have uniquely strong consumer protection laws and a uniquely large amount of fraud. Irreversible payment rails are a nightmare for consumers who are used to chargebacks being built in to the payment rail, and banks are skeptical of exposing such rails to consumers because most of the time the banks are required to make good when the customer is defrauded.

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants. But I believe even that will change in the future, to the benefit of Pix-like systems.

Does Pix offer something like credit card rewards? I understand that you ultimately pay for this through fees that make prices slightly higher, but it is still an incentive to use credit cards over other payment methods.

> Right now, the only thing that makes credit cards a better proposition is being able to pay without having enough money in the bank, and maybe enjoying greater protection from fraudulent merchants.

Rewards is another big one and the reason I personally prefer to use credit cards where possible.

India has UPI. China has something. It is only a good thing that this should spread everywhere.

I started using Pix, because it's the best way to do business with Chinese ecommerce sites.

You don't have to give your credit card details and refunds go straight back to your account.

In fact, it really impressed me that Aliexpress got it working before many Brazilian sites.

Pix blew other kinds of bank transfer out of the water. TED, DOC, Boleto, were slow and expensive. Pix is instant, free for most people, and just works.

No, the Central Bank of Brazil did not force any person to start using Pix.

Also, care to elaborate why you think the spec is complicated and hard to implement?

It costs up to ~$9m per year, processing 63 billion transactions per year: https://oglobo.globo.com/economia/noticia/2024/10/03/bc-gast...

Banks pay a small fee (less than a cent) per batch of transactions.

Pix is free for natural persons and individual entrepreneurs. For businesses, receiving is free, but they pay a fee to send money[0], this can vary from one institution to another.

[0] https://www.contabilizei.com.br/contabilizei-responde/taxa-p...

If the central bank offers it, it would be the equivalent to cash. Cash is also expensive to maintain and issue. Do you ask all the same questions as who pays for cash?

Because highly secure coin wouldn't allow the government to track money.

I firmly believe that the Federal Agencies do not fight bitcoin exactly because it is so easily tracked.

You're describing a CBDC, not a coin. Why isn't it being done? Because commercial banks are vehemently against that. The current administration in particular will never go against the big banks.

> Is the demand for control so much greater than the demand for money combined with providing a public good?

Yes. Also the current administration is hostile to public goods as a concept.

The politics around this is very weird. The US is basically regularizing "stablecoins" as electronic dollar-proxies while banning central bank digital currencies which the Fed has never planned to do. Basically to ensure all the profit and privacy risks stay in the private sector.

So like Circle's USDC Circle Payments Network?

Because nobody needs a cryptocurrency when you have a centralized trusted broker.

You can’t create a moat to skim 3% of the economy as a for profit venture.

Minor annoyance, but just a few limitations and restrictions, after all you need a smartphone and internet connection.

So.. when paying in a store, you need to open your banking app in your smartphone, and if you’re in an area with bad cellular connection (inside a few buildings or in a countryside), you need to connect to the store wifi. Only then you can scan the store QR code and make the payment.

So a single payment can easily take a few minutes, as opposed to a contactless card payment which takes a few seconds.

My main issue with pix is the even more reliance on a smartphone for our day to day life.

From the comments it seems that it is essentially the same as using cash as far as no buyer protection if you want to challenge a charge like you can with a credit card.

I had never heard of wero, despite living in Belgium and having been actively involved in fintech. Android also tells me that the app is not available in my country.

Sounds like it's supposed to replace Payconiq (which is currently the biggest mobile payment service in Belgium).

The fragmentation of payment services is starting to annoy me. I can use cash or cards everywhere in the eurozone with 100% compatibility. But every handful of banks in every country has decided to create their own payment "solution". Typically using Android & iOS apps that require an insane number of permissions (including location and wifi connections!?).

Looks like wero is just more of the same. Another non-standard that's only supported by a handful banks in a handful of countries. And I'll bet it won't work on rooted android devices, and that there won't be a web version.

At least it's built on top of SEPA Instant Payments, which is a step forward...

There is also the Digital Euro project. Though no timeline exists yet.

https://www.ecb.europa.eu/euro/digital_euro/html/index.en.ht...

wero is a private company, from Belgium, not an EU initiative.

In the same vibe you have Lydia in France that is successful.

As far as I understand with WeChat you can't disputes purchases and do things like chargebacks. If your phone is somehow stolen and account drained (they'd need to know your pin..) then you're probably be screwed?

So there isn't the concept of insurance as far as I understand.

Not to defend the credit card companies in the slightest.. but its a bit apples to oranges

What are UnionPay's fees? That's the correct comparison, not WeChat.

PayPal/CashApp have zero transaction fee as well for person-to-person transfers.

They're set at whatever the payment networks can get away with. There's nothing that says that's good for anyone else, although it is very good for Mastercard and Visa.

> My suspicion is that 3ish% is the optimal value or a very large anti-trust investigation (not a price cap) is in order.

Why do you have this particular suspicion when you claim you haven't actually looked into ~any of the questions you raised?

> does making credit cards a less lucrative business lower credit card penetration?

It doesn't, EU uses card payments much more than the US. So end of discussion there, it got cheaper with no negatives, just positives.

Oh come on. You are going to debate whether a 3% parasitic tax is good or bad. Interchange is paid on debit card transactions too, it's not credit card specific.

I think that there's very little reason to suspect that a rent-seeking middle man getting a bigger piece of the pie is in any way good for the efficiency of the value transfer system, first order or not. You're kind of crab-walking around making a point here.

and along the same lines, how good is the fraud prevention, detection, and recovery?

A bit pedantic, but especially relevant in a conversation about government-permitted monopoly power: while requiring minimum spend might be in breach of the payment networks' contracts, and may give rise to _civil_ liability (and punitive measures towards the merchants), we shouldn't use language like "illegal" that implies that government would have any interest in, or capacity for, proactive enforcement.

When we use language that evokes the mechanisms of state and implies they'd be used to enforce a monopoly power, we imbue that power with the gravity of those mechanisms, and further entrench it as a "way of life." We should be especially careful of that when said monopoly/duopoly essentially creates and enables a private taxation of the primary source of credit to many in the world!

Better words is: against terms of visa/Mastercard rather than illegal. Businesses have valid reason for minimum payment. There is minimum fee in visa or master card like 30cents or so. If shop selling candy bar for $0.5 they are loosing money if someone pay with card.

Visa and Mastercard have a net profit margin in the order of 50%. Do you think that's justified for the service they're providing, and is indicative of a healthy market/competition?

As I remember it credit card minimums were only a thing at smaller shops but usually didn’t apply to debit cards.

Most credit cards in the UK at least (same cap) have no standard account fee. Those that do come with other perks / beyond the 'world elite' etc side Mastercard/visa aren't seeing that money - its going to the issuing bank. Bank accounts also generaly have no standard fees (and a lot of other things we take forgranted - faster payments (if I send money to a friend/business I can do it instantly for free without needing a third party solution), standing orders, direct debit etc. - that make banking far easier than in the US).

There is also regulation in place that restricts predatory fee practices, getting customers into revolving debt and protection that makes card issuers liable for purchases (Section 75 - e.g. if I order something paying with my credit card and the merchant doesn't pay, the card issuer is legally liable / I can claim from them and its on them to get it from the merchant)

I was really surprised that it was normal to have account fees in the US. In the UK banking is free, at least until you hit an overdraft charge. They even made Bank ATMs fee free whatever bank you are with around 2000 (non bank ATMs still have a charge.)

Other than Amex for airline points I don’t spend a penny on banking, all the standard services (eg transfers, bill payments, cash withdrawals, deposits) are free (in the U.K.) with no monthly fee.

I pay 3€ per month to "Nordea" for "unlimited" accounts and one VISA debit card.

>Is there information on EU vs US credit limits?

I would be very interested in this as well.

My understanding is that cashback cards of the type we have everywhere in the US (e.g. Amazon Amex = 5% back on Amazon purchases, Wells Fargo Active Cash = 2% back on everything) don't exist elsewhere.

Another example: I just earned $1000 from Chase Sapphire as a new customer bonus for diverting $5K of the spending I would do elsewhere on that card over three months.

This is disgusting. Calling the biggest democratic party as authoritarian is nothing but disgusting.

Why do you people think you and your opinions are better than majority?

You really need to up your game if you think the world's most awarded and most popular Premier (PM Modi) and the most hard working political party (BJP) India has ever got, can be tarnished by someone snidely taking political potshots at Modi+BJP's most famous and incredible achievement yet: UPI.

It is poor manners to deride the visionary leaders of modern India as "authoritarian" when they ensured India remains world's biggest & most vibrant democracy and swiftly scaled the nation to a $5Trillion economy! That's why Modi has been democratically elected as PM for third time in a row!

Now back to the main topic at hand..

First and foremost, UPI is India's most popular real-time unified payments system and it is completely dominating the digital payments scene in India, because it is instantaneous, free for consumers (marginal fees applicable only for high value transactions, and where Interchange conversion is involved). UPI is so good and versatile, that its managing organisation NCPI is able to license the technology stack to other nations, who are then able to promptly launch their own branding of this versatile and powerful digital payments system.

Secondly, sheer scale of UPI is mind-boggling indeed.

In June 2025, UPI (Unified Payments Interface) recorded 18.39 billion transactions, with a transaction value of ₹24.03 lakh crore. The daily average for June 2025 was 613 million transactions and ₹80,131 crore. UPI has shown strong year-on-year growth of 32% in volume and 20% in value compared to June 2024.

Thanks to UPI, the payments situation has changed so drastically in India, that most banks are accounting for 85%+ payment transactions volumes through UPI itself!

Even the poorest people in India are using UPI ubiquitously and safely, it is that trustworthy, instantaneous and seamlessly easy to use.

No wonder Visa, MasterCard, and their ilk are terrified and desperate in India. Their vicious stranglehold has been broken, and how!

But vast majority of people make most their transactions domestically. Why cater for the minority? Also, both can exist.

Fun fact: UAE's "Jaywan" cards (currently Debit Cards only) is UAE initiative to replace Visa, Mastercards, etc., and Jaywan itself is based on India's NCPI org's technology stack used for RuPay. So Jaywan is RuPay tech implemented in UAE! Other countries are following suit as NCPI has taken extraordinary efforts to make this technology stack versatile, scalable, interoperable, robust, resilient and easy to implement and customize.

So India is becoming the world leader in digital payments!

> These payment processors seem to be basically levying a 1-3% tax for the convenience of using their service, and we are willingly paying it.

Fixed.

Too bad but good that Europe at least have SEPA for euro money transfer so not dependant on SWIFT and at least for mobile payment you have many systems in different European countries like e.g BLIK in Poland

The final straw was a trip to the UK. My debit card had foreign transaction fees and then I was waiting in the cattle call area for a BA flight seeing people significantly more relaxed coming out of airport lounges.

My system, so to speak, is really nothing. Sign up bonuses, (American Express wanted me bad), read the fine print and work the benefits, use the right card for the given transaction.

Does this make sense? No, it does not. Yet here we are. I've always detested this stuff yet merchants are forcing me to take this benefit. So I take it.

FWIW, 99% of my transactions are with my phone. So there is no flex involved. My iPhone makes the transaction virtually the same as with a debit card.

It's often about getting benefits out of transactions you're going to make regardless of how you pay for it.

If you're going to buy groceries, does it matter if you pay cash (debit) or use a credit card? The credit card gives you some percentage of that purchase back in rewards, which you then redeem on other things such as airfare, hotels, dinner out, uber, etc.

Think of it like a coupon that's valid everywhere, and every time you use it, a tiny sum is deposited into a savings account.

Pay it off at the end of the month and it's pretty much free money. Credit cards also have better cardholder protections, security and safety than using debit cards or cash.

Some people use credit cards for every purchase and become highly skilled at maximizing card rewards. This is also why many will say card fees don't matter - you often accrue enough rewards to pay for the fee itself plus lots more, making the fee irrelevant. The fee is there to compel you to use the card often enough to exceed the fee's value.

Absolutely. Except that it is much harder to raise a dispute with UPI than, say, with a Chase card that used Visa network. But, I much prefer the national offerings to a private company charging as much as 0.5% of transaction value for doing almost nothing.

Yeah. High-margin, high-end businesses can afford the fees. If there's a space to compete it's low-margin businesses where 3% really stings, even if it's 3% of a smaller gross. I used to work with a company that served mainly immigrants and blue-collar workers, and something lower-fee than credit/debit was a constant conversation (we were partway through building an ACH backend by the time I left, but I don't know if that ever made it into production given concerns we had).

This is ecom, not in person, and we found these places are brand agnostic about payments— they don’t control the look/feel of PayPal, Klarna, etc. And for every Hermes, there are a dozen luxury merchants less anal about the brand.

White labeling the payments infra as “their pay” did intrigue them, but not enough

I think when the guy mentioned he studied past failures it's prime example of crunching the numbers and applying theories without actual common sense. "Ah yes, I wouldn't buy a Gucci bag for $999 but for $995 it's a deal done" you don't need PhD in economics to realize this is stupid.

The fact that the second part of his comment is full of acronyms "we ASDFed the GHIJ over KLMN" suggest it's yet another case of a manager completely detached from reality of average consumer.

I’m still convinced that someone could play our playbook and it would work. Just someone with deeper pockets and deeper industry connections.

Luxury is struggling in 2025 and is losing to the resale market which is growing 3x faster. They’re especially struggling with gen z. Build a branded luxury-only payments network that owns the category “buy to resell”. Attach purchase metadata to pay-by-bank identity for digital proof of purchase.

You have to play it right (digital proof of purchase generates social media posts and a verified stamp, ie buying it to flex). But that way you can convert young customers from rewards cards AmEx etc without having to compete on rewards

Ya we looked in to the wallet fund model and while it solves fraud concerns, it introduces new frictions (funding the wallet) that makes growth tough.

Cashapp pay is leading in this department, and since they own the POS terminal Square they’ve actually been able to implement QR payments in some SMBs. They get terrible adoption, though

The merchant would disagree, but the merchant is lying to themselves, haha. The tough lesson i had to learn was people’s stated preferences often don’t match their revealed preferences. I really wanted it to be true so i gave them a ton of benefit of the doubt, but still lukewarm response.

Regulation on interchange worked in Europe. The other option is government mandated support for bank transfer rails. That’s how UPI in India and Pix in Brazil took off- they were mandatory.

The US has FedNow, but it’s push only (not user facing, too high friction for checkout). RfPs are there but still low adoption.

I’ll talk to my cofounder about open sourcing.

In payments, though, the code isn’t the hard part. The hard part is the licensing/regulation and most of all the risk analysis. You need a partnership with someone with an MTL to move money; you need anti money laundering policies and sanctions screenings and to do KYB checks. These days that’s not that hard because there’s vendors for all that, but it’ll cost you low five figures and you need to go through an enterprise sales deals that take a month or two.

Even with all of that, you’ll probably still lose tens of thousands to Russian fraudsters who present as a perfectly legitimate American business.

Payments is a tough business

Stablecoins do seem to address all these concerns. USD backed, and I believe Visa/Mastercard are adding stablecoin support so that there will soon be stablecoin debit cards.

Our thesis on crypto was that American consumers will never pivot to a foreign currency to do retail purchases. That’s just too much friction. It’s possible we get proven wrong, though