Visa and Mastercard: The global payment duopoly (2024)

Content control and “moral censorship”

• Several comments focus on Visa/Mastercard pressuring platforms (e.g., Steam, Itch.io, porn sites) to drop adult content, calling this undemocratic private censorship exported globally.
• Others argue the driver isn’t puritanism but risk: porn and certain “adult” categories are correlated with high fraud, chargebacks, money laundering, and potential human‑trafficking liability, so banks classify them as beyond risk tolerance.
• There’s tension between this risk framing and examples where card networks still process payments for legal brothels and adult subscriptions, which makes the policy line look arbitrary or politically driven.

Why the duopoly persists

• Commenters stress network effects, bank relationships, and POS ubiquity as the real moat: any challenger must be accepted everywhere and integrated with existing banking rails.
• Some view lax or misfocused antitrust (especially in the US) as central: law still fixates on consumer prices, not bundling, self‑preferencing, or protocol gatekeeping.
• Others say the networks themselves stifle alternatives and fund political protection via lobbying.

Fees, rewards, and regulation

• EU caps interchange at ~0.2–0.3%, making cards “boring” (few rewards) but cheap for merchants; users take this for granted until they compare with US ~2–3% fees and triple‑digit billion annual costs.
• US commenters describe rich rewards ecosystems and signup bonuses funded by those higher fees, with debit/cash users effectively subsidizing heavy rewards card users.
• Debate ensues over whether ~3% is “optimal” or pure rent‑seeking; critics note card networks’ extremely high margins and limited transparency on true costs.

National and regional alternatives

• India’s UPI and RuPay, Brazil’s Pix, China’s domestic systems, Russia’s Mir, Norway’s BankAxept, Canada’s Interac, EU SEPA/Wero, and various QR systems in Asia are cited as proof that low‑fee, instant, state‑backed or domestic rails can massively displace Visa/Mastercard locally.
• Advantages: near‑zero or flat fees, instant settlement, broad inclusion. Downsides discussed: weaker chargeback/consumer protection, dependence on smartphones, and greater potential for state surveillance or transaction‑level taxation.

Politics, sovereignty, and US posture

• Several threads tie US government actions (e.g., WTO cases, scrutiny of Pix) to protection of US payment interests and financial surveillance power.
• Countries deploying domestic rails are framed as seeking sovereignty and insulation from US sanctions and corporate control.

Attempts at competition and crypto

• A founder who tried to build an ACH/FedNow “pay‑by‑bank” competitor reports merchants talk about fees but prioritize conversion and simplicity over savings; fraud and ACH reversals made the model fragile.
• Crypto and stablecoins are seen by some as the only realistic global alternative (especially for cross‑border remittances), but others note volatility, UX friction, regulatory moves, and the fact that card networks are themselves integrating stablecoins.