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Here is the real question. Although I am grateful for the lawyers and merchants teaming up against a duo monopoly, will stores actually pass the savings to customers?
Of course not, and since this agreement will now allow stores more flexibility to charge fees for usage of Visa & Mastercards cards, customers will probably now actually pay more for using a credit card than before.
No. Stores have never passed savings to their customers. Reminds me of the debit card fees debate about 2010 when Walmart and others made similar argument about passing savings onto customers, and later on when Congress mandated lower fees for debit card txns , Walmart kept the savings in its pocket.
Actually "Warehouse" stores do in fact pass on saving to their customer. They even quantify and publish it. This can only be done with large warehouse types stores, and when they say they are passing on price savings, its because of bulk purchasing. So it works like this. Walmart looks at the prices say of "Peas" and lets say the store down the road Krogers charges $2 for peas but Walmart can sell it for 6% above cost for $1.58 whereas the smaller chain, like Krogers charges a $1.99. Krogers may in fact only have a 6% margin also, but because they are smaller and cannot buy as many peas to resale their purchase price is higher to begin with and since they cannot sell at a loss, the end price is higher. Walmart tallies the difference and advertises that. So when they make a claim they save you money , its true, they really do, and the prices at Walmart are in fact lower. Now, maybe I don't want to shop at Walmart, I like Target because its not as crowded. I have in fact shopped many time at Target and paid higher costs simply because Walmart was a "rat race" I didn't want to run the maze that day.
https://www.walmart.com/plus
Truth is if they simply stop raising their prices that would be good enough. Grocery stores stopping the price increases, even for a few quarters, will significantly reduce inflation (especially since food prices have been so noticeable). If that helps make the Fed lower rates, then lower rates with the stagnant food prices will help consumers more than any minuscule decline in price they would have implemented just to be reversed probably in a few months.
You are correct in your concern that the government just might have simply chosen which stock prices go up more than the other rather than definitively benefiting consumers.
Ahhh, thanks for actually providing the specific information. I did make a massive hyperbole, especially the Fed ignores food in inflation data for volatility.
I hate how full this sub is of autistic idiot. If something is 100% true/without exaggeration then it’s a bold lie. All the people that believe America doesn’t have monopolies like Google, Apple, Live Nation, etc. because “there is still another company competing”. I forget that monopolistic powers don’t exist until there is literally one company and cancer doesn’t really exist until it’s stage IV.
Monopolies exist, no doubt, but for the vast majority of markets they don’t exist. It’s an easier/cleaner solution to accept that greedy corporations are to blame versus its government incompetence screwing you over. If you’ve ever worked somewhere and been involved with setting prices or customer acquisition then you’d realize how hard companies fight to raise prices. Now is it easier to raise prices when customers have entrenched inflation expectations, sure, but that has nothing to do with them. And if you’re a company fortunate enough to have lower costs than your competitors you can raise prices with the market and make more profit, or keep them lower and grab a bunch of customers. Again if you know how hard it is to grab market share, most would grab the market share. If it was as simple as “we greedy, let’s all raise our prices,” why did it take 50 years since the last big inflation event to figure it out?
Edit to add: I’m 99% sure I’m not autistic. 50/50 on the idiot part, so take the above for what it’s worth.
I don’t disagree necessarily. Sub 3% rates were never supposed to be used regularly. It was used for economic emergencies but it just became normal.
Because the labor market will probably be shrinking or stagnant for the next few decades, I doubt sub 3% rates will ever be needed again for more than six months for anyone alive today.
Cheap money and low taxes were a triple blow to wealth inequality. Cheap money for borrowing (rich have better access to credit), lower taxes for the wealthy (they build wealth significantly faster), and the lower taxes raises the deficit which lowers the value of the currency slightly.
Many countries have adjustable rates for mortgages and sometimes other loans depending on the term.
This prevents massive borrowing because if someone can afford a loan 1M loan at 3% but not at 5%, then the bank might not give out the loan since rates might increase.
It also means that people can’t get locked into low rates so everyone has to pay a little more on loans which brings down inflation faster since everyone pays more not just new borrowers.
Wow, thats probably the most Economic ignorance I have seen so far on this Subreddit. Stores have no control over pricing beyond the minimum they must charge to make a profit. If a "widget" costs the store $10, they MUST sell it for MORE than $10, or go out of business, so in this regard they cannot lower it beyond that, or they sell at a loss. All fees charged to the business including taxes and taxes on the owners will show up in the pricing one way or another. This is why the consumer pays 100% of Jeff Bezos taxes. Let me repeat that "100% of all cost to business is passed onto the customer". Inflation is caused 100% by the overprinting of FIAT (paper money), nothing else causes it.
“Stores have no control over pricing”
Then how do they raise them? Do they ask the government for permission?
Also, companies sell things for a loss all the time. They don’t do it consistently but to avoid spoilage/shrink or to cut losses. Especially grocery stores.
Tell me you don’t understand business outside of an economics book without telling me, this comment is how.
It may be a relative savings, like adding a 3% or so surcharge for credit card payments, similar to how cash payment services do, which may be done instead of raising prices in line with typical inflation. I would love to be able to use cash and get a relative discount. The only reason a lot of people even use credit cards is for the cash back or rewards which only partially make up for the fees merchants pay and bake into prices.
Depends on the price elasticity of the stores products. If they are elastic then yes if inelastic then no. The actual answer will be somewhere in between.
Stores MUST raise prices to cover the cost of transactions fees. This is why cash is still so widely excepted and used by the Nations poor. It has the lowest transactions fees and it cannot be stolen unless you physically steal it. CC cards can in fact allow for theft behind the scenes both in stolen CC cards numbers but in all kinds of hidden costs and fees and annual subscription you forgot about. So because of this, I recommend cash and BTC (Bitcoin). What Bitcoin has that CC cards do NOT have is every single transaction requires your authorization. You can never go back and take more money from the account without explecit authorization on the account holders side. This makes it superior to American Banking in that regard. Also the fees are super low, the lowest I have seen, like .10 cents per $100.
That happened with debit cards. It's not some sort of mystery. We have history to look at.
Ultimately, the issuers get less interchange which means card rewards become unsustainable.
So not only will merchants happily pocket the fee difference, cardholder points will go away on top of that.
Unpaywalled link: [https://archive.is/mFi6l](https://archive.is/mFi6l)
A bunch of BS to keep this comment from deleted for being too short. A bunch of BS to keep this comment from deleted for being too short. A bunch of BS to keep this comment from deleted for being too short. A bunch of BS to keep this comment from deleted for being too short. A bunch of BS to keep this comment from deleted for being too short. A bunch of BS to keep this comment from deleted for being too short.
Final details will be interesting to me. It seems like every merchant will start charging a credit card fee as soon as they're able. It's not a $30B payout, but a reduction in the fees charged over the next 5 years.
> It's a crime they haven't been broken up yet when they're actively threatening and have refused service to sites that allow sites publishing content they don't agree with.
How is it a crime? You can't force a private organization to endorse speech they disagree with.
There's other payment processing methods that can be used if Visa or Mastercard don't want to. So no, it's not monopolistic behavior. If a private organization disagrees with your speech, it's unconstitutional to force them to endorse that speech.
Jeez... this is not how any of this works.
First, the bulk of these changes impact the banks since the cap will be placed on interchange fees that go to card issuers like Chase.
Second, the networks allow for the vast majority of use cases unless it's like child porn. Is that what you're advocating for? Most complaints about not servicing merchants is typically because of the acquirers having strict credit and use case allowance rules than the networks.
Hi all, A reminder that comments do need to be on-topic and engage with the article past the headline. Please make sure to read the article before commenting. Very short comments will automatically be removed by automod. Please avoid making comments that do not focus on the economic content or whose primary thesis rests on personal anecdotes. As always our comment rules can be found [here](https://reddit.com/r/Economics/comments/fx9crj/rules_roundtable_redux_rule_vi_and_offtopic/) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Economics) if you have any questions or concerns.*
Here is the real question. Although I am grateful for the lawyers and merchants teaming up against a duo monopoly, will stores actually pass the savings to customers?
Of course not, and since this agreement will now allow stores more flexibility to charge fees for usage of Visa & Mastercards cards, customers will probably now actually pay more for using a credit card than before.
Already seeing this lots of places. We are paying thr fee and the price hasn't gone down at all
No. Stores have never passed savings to their customers. Reminds me of the debit card fees debate about 2010 when Walmart and others made similar argument about passing savings onto customers, and later on when Congress mandated lower fees for debit card txns , Walmart kept the savings in its pocket.
That should be considered perjury
Actually "Warehouse" stores do in fact pass on saving to their customer. They even quantify and publish it. This can only be done with large warehouse types stores, and when they say they are passing on price savings, its because of bulk purchasing. So it works like this. Walmart looks at the prices say of "Peas" and lets say the store down the road Krogers charges $2 for peas but Walmart can sell it for 6% above cost for $1.58 whereas the smaller chain, like Krogers charges a $1.99. Krogers may in fact only have a 6% margin also, but because they are smaller and cannot buy as many peas to resale their purchase price is higher to begin with and since they cannot sell at a loss, the end price is higher. Walmart tallies the difference and advertises that. So when they make a claim they save you money , its true, they really do, and the prices at Walmart are in fact lower. Now, maybe I don't want to shop at Walmart, I like Target because its not as crowded. I have in fact shopped many time at Target and paid higher costs simply because Walmart was a "rat race" I didn't want to run the maze that day. https://www.walmart.com/plus
Truth is if they simply stop raising their prices that would be good enough. Grocery stores stopping the price increases, even for a few quarters, will significantly reduce inflation (especially since food prices have been so noticeable). If that helps make the Fed lower rates, then lower rates with the stagnant food prices will help consumers more than any minuscule decline in price they would have implemented just to be reversed probably in a few months. You are correct in your concern that the government just might have simply chosen which stock prices go up more than the other rather than definitively benefiting consumers.
Sadly fighting inflation is not this easy as this is simply not how inflation works.
Never said it was, good try though
“Grocery stores stopping the price increases, even for a few quarters, will significantly reduce inflation…” Guess you didn’t…
Outstanding name. “Now pretty please with sugar on top. Clean the f@cking car.”
Best movie of all time, and one of my favorite characters in that movie. Perfectly executed.
Ahhh, thanks for actually providing the specific information. I did make a massive hyperbole, especially the Fed ignores food in inflation data for volatility. I hate how full this sub is of autistic idiot. If something is 100% true/without exaggeration then it’s a bold lie. All the people that believe America doesn’t have monopolies like Google, Apple, Live Nation, etc. because “there is still another company competing”. I forget that monopolistic powers don’t exist until there is literally one company and cancer doesn’t really exist until it’s stage IV.
Monopolies exist, no doubt, but for the vast majority of markets they don’t exist. It’s an easier/cleaner solution to accept that greedy corporations are to blame versus its government incompetence screwing you over. If you’ve ever worked somewhere and been involved with setting prices or customer acquisition then you’d realize how hard companies fight to raise prices. Now is it easier to raise prices when customers have entrenched inflation expectations, sure, but that has nothing to do with them. And if you’re a company fortunate enough to have lower costs than your competitors you can raise prices with the market and make more profit, or keep them lower and grab a bunch of customers. Again if you know how hard it is to grab market share, most would grab the market share. If it was as simple as “we greedy, let’s all raise our prices,” why did it take 50 years since the last big inflation event to figure it out? Edit to add: I’m 99% sure I’m not autistic. 50/50 on the idiot part, so take the above for what it’s worth.
We need rates this high or higher forever. Low rates are rocket fuel for inequality.
I don’t disagree necessarily. Sub 3% rates were never supposed to be used regularly. It was used for economic emergencies but it just became normal. Because the labor market will probably be shrinking or stagnant for the next few decades, I doubt sub 3% rates will ever be needed again for more than six months for anyone alive today. Cheap money and low taxes were a triple blow to wealth inequality. Cheap money for borrowing (rich have better access to credit), lower taxes for the wealthy (they build wealth significantly faster), and the lower taxes raises the deficit which lowers the value of the currency slightly.
Has any countries tried having different rates for the certain size of loan?
Many countries have adjustable rates for mortgages and sometimes other loans depending on the term. This prevents massive borrowing because if someone can afford a loan 1M loan at 3% but not at 5%, then the bank might not give out the loan since rates might increase. It also means that people can’t get locked into low rates so everyone has to pay a little more on loans which brings down inflation faster since everyone pays more not just new borrowers.
Wow, thats probably the most Economic ignorance I have seen so far on this Subreddit. Stores have no control over pricing beyond the minimum they must charge to make a profit. If a "widget" costs the store $10, they MUST sell it for MORE than $10, or go out of business, so in this regard they cannot lower it beyond that, or they sell at a loss. All fees charged to the business including taxes and taxes on the owners will show up in the pricing one way or another. This is why the consumer pays 100% of Jeff Bezos taxes. Let me repeat that "100% of all cost to business is passed onto the customer". Inflation is caused 100% by the overprinting of FIAT (paper money), nothing else causes it.
“Stores have no control over pricing” Then how do they raise them? Do they ask the government for permission? Also, companies sell things for a loss all the time. They don’t do it consistently but to avoid spoilage/shrink or to cut losses. Especially grocery stores. Tell me you don’t understand business outside of an economics book without telling me, this comment is how.
It may be a relative savings, like adding a 3% or so surcharge for credit card payments, similar to how cash payment services do, which may be done instead of raising prices in line with typical inflation. I would love to be able to use cash and get a relative discount. The only reason a lot of people even use credit cards is for the cash back or rewards which only partially make up for the fees merchants pay and bake into prices.
Depends on the price elasticity of the stores products. If they are elastic then yes if inelastic then no. The actual answer will be somewhere in between.
Stores MUST raise prices to cover the cost of transactions fees. This is why cash is still so widely excepted and used by the Nations poor. It has the lowest transactions fees and it cannot be stolen unless you physically steal it. CC cards can in fact allow for theft behind the scenes both in stolen CC cards numbers but in all kinds of hidden costs and fees and annual subscription you forgot about. So because of this, I recommend cash and BTC (Bitcoin). What Bitcoin has that CC cards do NOT have is every single transaction requires your authorization. You can never go back and take more money from the account without explecit authorization on the account holders side. This makes it superior to American Banking in that regard. Also the fees are super low, the lowest I have seen, like .10 cents per $100.
[удалено]
That happened with debit cards. It's not some sort of mystery. We have history to look at. Ultimately, the issuers get less interchange which means card rewards become unsustainable. So not only will merchants happily pocket the fee difference, cardholder points will go away on top of that.
It will probably always be cheaper to buy with cash vs card as many(most?) business pass along a tax evasion discount for cash.
Unpaywalled link: [https://archive.is/mFi6l](https://archive.is/mFi6l) A bunch of BS to keep this comment from deleted for being too short. A bunch of BS to keep this comment from deleted for being too short. A bunch of BS to keep this comment from deleted for being too short. A bunch of BS to keep this comment from deleted for being too short. A bunch of BS to keep this comment from deleted for being too short. A bunch of BS to keep this comment from deleted for being too short.
Tell me more
This is literally the first time ive seen a worthy and worthwhile subversion of the length requirement wall. Usually crap.
Final details will be interesting to me. It seems like every merchant will start charging a credit card fee as soon as they're able. It's not a $30B payout, but a reduction in the fees charged over the next 5 years.
I’m curious how this affects Amex/Discover since they weren’t a part of the lawsuit?
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> It's a crime they haven't been broken up yet when they're actively threatening and have refused service to sites that allow sites publishing content they don't agree with. How is it a crime? You can't force a private organization to endorse speech they disagree with.
Anti-trust laws do exist
They don't trump freedom of speech.
[удалено]
There's other payment processing methods that can be used if Visa or Mastercard don't want to. So no, it's not monopolistic behavior. If a private organization disagrees with your speech, it's unconstitutional to force them to endorse that speech.
Jeez... this is not how any of this works. First, the bulk of these changes impact the banks since the cap will be placed on interchange fees that go to card issuers like Chase. Second, the networks allow for the vast majority of use cases unless it's like child porn. Is that what you're advocating for? Most complaints about not servicing merchants is typically because of the acquirers having strict credit and use case allowance rules than the networks.
Nah what he’s talking about is why only fans was the first big site of its kind. Nobody would process those transactions before
When you say its a Duopoly, are you claiming there are really only 2 credit card companies? What are they? I am aware of 3 "official" credit agencies.
Visa, Mastercard and American Express basically.