arjie
4 hours ago
Surprisingly small contract. It's interesting to see that a full government contract for a payment provider is a fraction of a US mid-size company's cloud bill. I am constantly surprised by things like this. Here's another: there are more foreigners in Taiwan (total pop. 25 m) than in China (total pop. 1.4 b).
matt-p
2 minutes ago
Interchange average in the UK was about 0.2% last time I looked (which was a few years ago), it't not much anyway.
Also the government doesn't really do card transactions. I imagine this is for fairly rare things like renewing your passport, booking a driving test or buying a title copy. Oh and visa fees maybe? Small beer anyway, it's not like people are paying taxes via card.
colechristensen
an hour ago
Payment processing costs are a scam. They're 10x as expensive as they need to be to fund rewards programs and fund the financial system.
EU max credit card transaction fees are 0.3%, in the US they can be up to 4%.
It just doesn't cost 4% of a transaction to handle the exchange of funds. Just wealth transfer to finance people and the upper class who take advantage of credit card perks.
switz
an hour ago
Can someone explain to me if EU card transactions are capped, why Stripe charges me (US) the full ride on my EU customer's cards? In fact, I get charged even more for EU cards – perhaps as much as 2.5% extra.
I just checked and I get charged ~8% in fees on a 10 euro transaction on Stripe. Of course some of that is the low transaction amount (flat 0.30), but it's brutal for a small business like myself.
2.9% + 1.5% (intl card) + 1% (currency conversion) + 0.30
Payment amount (€1.00 EUR = $1.15253 USD)
€10.00 EUR -> $11.53 USD
Fees
Total: - $0.93 USD
Stripe currency conversion fee
- $0.12 USD
Stripe processing fees
- $0.81 USD
Net amount
$10.60 USD
CodesInChaos
33 minutes ago
The EU only capped interchange fees, which is the amount that goes to the bank that issued the card. It did not cap the fees that go the your PSP. Which makes sense, since you can pick the PSP you do business with, but you can't pick the bank that issues your customer's cards.
(And I don't think it applies to US merchants like you anyways)
https://ec.europa.eu/commission/presscorner/detail/en/ip_15_...
bijowo1676
an hour ago
perhaps they are capped only for EU merchants, because EU government works to protect their own companies and citizens from foreign artificial unregulated monopolies.
in US, the government is more protective of private monopolies due to lobbying
colechristensen
an hour ago
You're not in EU so the full stack is happy to charge you whatever it can.
era-epoch
43 minutes ago
Yeah, you don't live in the EU.
sph
44 minutes ago
Uh… more profit?
enos_feedler
36 minutes ago
As someone who really enjoys rewards programs, keep those scams alive!
KetoManx64
15 minutes ago
The irony is that every couple you shop with just increases the prices of their items to deal with the fees, so you're just paying more for items to feel good about getting reward program benefits.
matt-p
5 minutes ago
You are also being subsidised by debit card users.
ArmadilloGang
33 minutes ago
Might want to think twice about that: https://www.nytimes.com/2023/11/21/opinion/credit-card-rewar...
lennessy
8 minutes ago
You are assuming they don't know about all this already when I feel like they have made it quite clear they do.
fragmede
an hour ago
Except in the US, it does. Depending on the card, it can cost as much as 4.5% (or more!) to run the card. You can argue that it shouldn't, but that's a different statement than it doesn't.
colechristensen
an hour ago
uh, I'm including the card issuers as participants in this multi-party scam
fragmede
5 minutes ago
It's still costing them > 3%.
bijowo1676
42 minutes ago
it is illegal for Merchants to charge credit card processing fees by law, they have to absorb these fees and cannot display them to the customer.
This naturally protects the artificial oligopoly of visa/mc/discover systems.
The moment you allow Merchants to charge cc fees (even 2-3%) and allow customer to choose low processing option (ACH/debit card/cash), the whole scheme falls apart and Visa/MC will slowly go bankrupt
colechristensen
38 minutes ago
>it is illegal for Merchants to charge credit card processing fees by law,
This is only true in 4 states.
bijowo1676
35 minutes ago
the typical Merchant<->bank agreements all have clauses forcing them to absorb these fees and explicitly barring them from separately charging customer CC fee.
and most small/med businesses dont have clout to protest that, so they have to accept these terms in order to earn money
toomuchtodo
4 hours ago
Brazil's central bank operates their instant payment network Pix [1] [2] [3] for ~$10M/year [4]. Its not that these are small contracts, but that large, inefficient, unnecessary contracts have become the norm (I argue). Similar example from India's UPI payment system [5]. The US has FedNow to move instant payments for pennies, but banking and payment system participants in the US ecosystem are avoiding it to continue to private payment system rake [6] (cc networks, Zelle commercial bank network, private wallets, etc).
The evidence is clear you don't need to skim 3% off of an economy to provide instant payment capabilities. The enterprise value of US payment companies is a function of how long they hold onto this volume for, when competition is ramping up. You're just pushing ISO 20022 XML messages around a bus.
[1] https://en.wikipedia.org/wiki/Pix_(payment_system)
[2] https://frontierfintech.substack.com/p/55-send-pix-brazils-i...
[3] https://brazilstockguide.com/behind-the-lines/the-cost-of-pi...
> This makes the American dispute more sophisticated than it may first appear. Pix certainly puts pressure on private payment models, card networks and acquirers. It also reduces friction for consumers, small businesses and person-to-person transfers. But its deeper effect is institutional. It turns the bank deposit into an even more efficient payment instrument — and, by doing so, changes the role of banks in liquidity intermediation.
> There is an irony here. For decades, the United States built the narrative of private financial innovation. Brazil, through a public, interoperable and massively adopted system, produced one of the world’s most efficient payment infrastructures. The study notes how unusual Pix adoption was: more than 150 million users in its first year, use by nine out of ten small businesses, and daily volumes capable of reaching about 1% of annual GDP on a single peak day.
> The reading should not be triumphalist. Pix is a powerful innovation, but it is not cost-free for the financial system. It improves the user experience, reduces transaction costs and increases competition in payments. At the same time, it requires banks to hold more liquidity and may reduce the transformation of deposits into credit. For the United States, Pix appears as a digital-trade issue. For Brazil, it is a question of financial sovereignty. For banks, it is a question of liquidity. Pix began as a button inside an app. It became a piece of financial policy — and now, of geopolitics.
[4] https://news.ycombinator.com/item?id=44753626
[5] https://en.wikipedia.org/wiki/Unified_Payments_Interface
[6] https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
kyrra
an hour ago
The BCB in Brazil does very little to operate Pix. It's effectively a P2P system, where the BCB forces all the banks to interop with one-another (and all the banks directly call eachother). They can operate it that cheaply because they do close to nothing technically (they host the main discovery endopints). The only place the BCB actually ingests data is via their reporting mechanisms.
UPI is a bit more centralized, where the NPCI does the top-level routing between banks, so their operating budget is likely much higher than Pix. It also is drastically more simple to be a participant in UPI compared to Pix.
For Pix adoption: you can thank Covid for that. The Brazilian government said if you wanted to get free money from the government, you had to set up and use Pix.
US Financial Innovation: I'd say the hard thing here is that the government is extremely strict (lots of regulation) when you start looking like a bank. Lots of companies have tried to innovate here, but regulation makes it really hard to do. There's a lot of regulator capture going on.
jorvi
3 hours ago
Feels odd that you exclude mentioning the EU, which has had instant transfers for more than a decade. More than two decades, if you include things like iDeal from The Netherlands.
alibarber
an hour ago
Some banks in some parts of the EU have - SEPA instant was only mandated in January 2025, only for Euro payments.
toomuchtodo
3 hours ago
Wasn't intentional, I mention SEPA and Wero in other comments, not intended to be an enumeration of all instant payment systems currently active globally. My apologies!
https://www.pymnts.com/wp-content/uploads/2025/05/PYMNTS-Rea...
https://www.emerald.com/cemj/article/33/4/575/1248919/The-ri...
jorvi
3 hours ago
> not intended to be an enumeration of all 54 instant payment systems currently active.
Even then, not mentioning those who pretty much started / invented instant transfers still seems odd :) but no need to apologize haha, maybe I was a bit too abrasive.
I get why you prioritized to mention those though. The Chinese and Indians have leapfrogged us. No more fussy legacy (digital) cards, just scan a QR and go. Even illicit food stalls and street wanderers have accounts, when they wouldn't be able to get a 'real' bank account.
And the Chinese and Indians don't have to pay tribute to the Mastercard-Visa overlords either. Although Wero and the digital Euro might eventually change that for Europe too.
dumpsterdiver
2 hours ago
Can you imagine how cumbersome conversations would become if people felt obligated to qualify ad-hoc statements with what amounts to a historical ledger?
Every new entry would open up an opinion around “if you included that, why didn’t you include this?”
In such cases we’ll always up at Kevin Bacon.
actapp80
4 hours ago
don't centralized payment systems like this reduce the overall resilience of the ecosystem and prevent future innovation? You hint on those lines with the possible future transformation of deposits into credit.
Why doesn't the US private ecosystem manage to lower costs similarly? (Zelle comes to mind). It is interesting that this has happened in more highly regulated countries where the free market likely could not have come up with a cheaper solution on their own due to the same overbearing system that effectively forces adoption of this centralized solution.
toomuchtodo
4 hours ago
All payment systems are centralized. Zelle is owned by the largest US commercial banks ("Early Warning Services"), Congress directed the Federal Reserve to build and offer FedNow as a utility so smaller banks would not be excluded from offering instant payments. It costs $~30/month (last I checked the rate sheet) to plug into it. The instant payments are the utility, your opportunity to innovate is using this as a component of your user experience.
Propose some innovation here, I am interested, as someone adjacent to payments in financial services. Besides instant payments, the most we've seen is closed wallets (Venmo, Cash App) no longer needed with broad instant payment access from most demand deposit accounts and Buy Now Pay Later (BNPL) (and I argue BNPL is simply dressing revolving credit card debt up as innovation).
> Why doesn't the US private ecosystem manage to lower costs similarly? (Zelle comes to mind). It is interesting that this has happened in more highly regulated countries where the free market likely could not have come up with a cheaper solution on their own due to the same overbearing system that effectively forces adoption of this centralized solution.
Because it is a grift ("regulatory capture") [1] [2]. The "overbearing system" is the result of regulation to bring the consumer excess of cheap payments to an entire country's financial user population. Why does Jamie Dimon not like stablecoin yield [3]? Because JPMC makes almost $100B/year in interest income taking customer deposits and lending against them, which stablecoins would compete against by operating as a form of narrow bank, parking the underlying deposits in risk free US Treasuries [4].
As a US financial services consumer, it is hard for you to avoid the rake of the machine built to skim off of you as you hold onto fiat or move it, but the rest of the world can avoid being captured by it (as this piece demonstrates). Also, Europe can't regulate Stripe as easily as they can Adyen. You don't have to be the biggest or the greatest, it just has to work "good enough".
[1] https://www.thebignewsletter.com/p/the-109-billion-bank-hust...
[2] https://www.thebignewsletter.com/p/the-cantillon-effect-and-...
[3] https://www.politico.com/news/2026/05/29/dimon-jpmorgan-cryp...
actapp80
3 hours ago
> Propose some innovation here, I am interested, as someone adjacent to payments in financial services. Besides instant payments, the most we've seen is closed wallets (Venmo, Cash App) no longer needed with broad instant payment access from most demand deposit accounts and Buy Now Pay Later (BNPL) (and I argue BNPL is simply dressing revolving credit card debt up as innovation).
UPI for instance only works with a physical SIM. Your phone number on the account must match the physical SIM on the device. This indirectly relies on India's insistence on KYC (for accounts naturally) on issuance of physical SIMs. "Innovation" here would be a player who can support VOIP based phone numbers (maybe by complying with phone number KYC in some other way).
UPI also makes it quite confusing to deposit money to a particular account you own. You could share a specific identifier (string or qr) based on your account but the other party generally assumes they can send you money using your phone number, and sometimes follows through with that.
(I don't have a finance background.) There any multiple instances of a one-size fits all user experience decision which strikes me as a result of the centralization and removal of competition (in efforts to drive up adoption).
I don't disagree with most of your reply (thanks for the thoughtful citations too). But i wonder why the free market cannot lower cost/settlement time similarly.
toomuchtodo
3 hours ago
> UPI for instance only works with a physical SIM. Your phone number on the account must match the physical SIM on the device. This indirectly relies on India's insistence on KYC (for accounts naturally) on issuance of physical SIMs. "Innovation" here would be a player who can support VOIP based phone numbers (maybe by complying with phone number KYC in some other way).
The Indian government has mandated this for strong identity assurances. Your only hope at "innovation" (ie violating financial services regulators and laws) here is cash or something like Monero.
> UPI also makes it quite confusing to deposit money to a particular account you own. You could share a specific identifier (string or qr) based on your account but the other party generally assumes they can send you money using your phone number, and sometimes follows through with that.
I haven't used UPI recently, but I imagine this is a UX issue around aliases (phone numbers, email, and other human identifiers that associate to an underlying account).
TLDR People problems cannot be fixed with tech (in this context, regulatory requirements or alias UX, submit a public comment to the regulator if you can).
> I don't disagree with most of your reply (thanks for the thoughtful citations too). But i wonder why the free market cannot lower cost/settlement time similarly.
Because without regulation, it turns into Monopoly (the board game). Sometimes, competition can be encouraged, but in some cases (broad, shared infrastructure) it cannot and regulation must fill this gap to ensure the target outcome. This is why we regulate electric utilities similarly. Happy to help, I am very interested and curious on this topic.
cherryteastain
2 hours ago
> All payment systems are centralized
Except for blockchain based ones
toomuchtodo
2 hours ago
None of which are in production at scale. I admit crypto is optimal for less than legal transactions and speculation, but the volume for legal payment transactions is negligible.
cherryteastain
4 minutes ago
Solana mainnet was shown to have capability to handle 100k transactions per second [1]. Granted, it was a synthetic benchmark of noops, but it shows the capability is there. For reference, Visa claim 83k TPS [2] for their system. It also has the advantage of being vastly cheaper than tradfi payment networks at ca. $0.0005 per transaction [3] irrespective of transaction amount, unlike the big three credit card networks who charge 1-3%.
[1] https://www.coindesk.com/markets/2025/08/18/solana-briefly-h...
[2] https://corporate.visa.com/en/sites/visa-perspectives/securi...
[3] https://solana.com/learn/understanding-solana-transaction-fe...
testfrequency
4 hours ago
Why bring up Taiwan and China? This feels incredibly cherry picked?
If you know Taiwan’s history, and you understand China - there’s no surprise to be..
arjie
3 hours ago
Well, obviously it’s cherry-picked. It’s an example of something that challenges my intuition. Most things align with my intuition because I’m in my late 30s and have seen enough of the world to have a fairly good idea of the rough numbers. Here’s another one: the London Underground is older than the telephone.
There’s a light board game called Timeline where you have stuff like this and there are so many surprises. Temporal stuff is hard to reason about and the game catches that. But with large numbers one loses intuition easily: NYC’s subway vs. all domestic and international US air travel is closer in total passengers than one would think. The median American did not fly last year.
Stuff like this. It’s just Gladwell-fodder but numerically fun.
testfrequency
3 hours ago
I misinterpreted your intent here, and that’s on me. Thank you for explaining, you clearly picked the sample as a comparison of fact, not as narrative. Apologies