The Card Game

DevilFin13 · Jan 6, 2010

How Visa, Using Card Fees, Dominates a Market

http://www.nytimes.com/2010/01/05/your-money/credit-and-debit-cards/05visa.html

When you sign a debit card receipt at a large retailer, the store pays your bank an average of 75 cents for every $100 spent, more than twice as much as when you punch in a four-digit code.

The difference is so large that Costco will not allow you to sign for your debit purchase in its checkout lines. Wal-Mart and Home Depot steer customers to use a PIN, the debit card norm outside the United States.

Despite all this, signature debit cards dominate debit use in this country, accounting for 61 percent of all such transactions, even though PIN debit cards are less expensive and less vulnerable to fraud.

How this came to be is largely a result of a successful if controversial strategy hatched decades ago by Visa, the dominant payment network for credit and debit cards. It is an approach that has benefited Visa and the nation’s banks at the expense of merchants and, some argue, consumers.
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Fin D · Jan 6, 2010

DevilFin13 said:

How Visa, Using Card Fees, Dominates a Market

http://www.nytimes.com/2010/01/05/your-money/credit-and-debit-cards/05visa.html
Click to expand...

Its not illegal but it is unethical. Its also the kind of thing that happens when capitalism is allowed free reign.

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