[zarkov99]

They also reportedly shutdown Subscribe Star recently, when people started to use it instead of Patreon, in the wake of the Patreon banning of some prominent You Tuber. This isn't working. The free market doesn't seem to work well in the tech world, where we have all powerfull monopolies controlling what we say, what we know and what we buy. We need new laws.

[qeternity]

> They also reportedly shutdown Subscribe Star recently, when people started to use it instead of Patreon, in the wake of the Patreon banning of some prominent You Tuber. This isn't working. The free market doesn't seem to work well in the tech world, where we have all powerfull monopolies controlling what we say, what we know and what we buy. We need new laws.

This is not what a "free market" means. Paypal is not remotely a monopoly, nor is Patreon.

[Tehnix]

MasterCard and Visa are though. If you note elsewhere in the thread, it’s basically on their request that a lot of people have been banned.

[briandear]

However, sites could accept IBAN transfers, Diner’s Club, Bank drafts, Amex, Discover, JCB, Apple Pay (Apple Pay Cash)... People could even use Transferwise.

The are a lot of ways to not have to accept MC or Visa.

[dingaling]

Even six years ago when I was shopping around to buy some Bitcoins it was already impossible to use Transferwise and most banks had blocked transfers to known cryptocurrency exchanges. When the financial industry wants something ostracised they are quick to move in the same direction.

[Tehnix]

That's about as real an alternative as if I said you could just send me a mail instead of sending me an email.

> IBAN transfers...Transferwise

Obviously incredibly slow and a lot of work.

> Diner’s Club, Amex, Discover, JCB

Haven't seen these in Europe.

> Apple Pay (Apple Pay Cash)

Limited to banks that support it. In e.g. Denmark, that's only two of the minor ones, meaning far from the majority of people.

[SmellyGeekBoy]

You haven't seen AMEX in Europe? I've had one for years and used it all over Europe with zero problems whatsoever.

[prepend]

Your observation doesn’t change that OP hasn’t seen it.

Amex is a small card processor. According to the Nilson report [0], Visa and MasterCard made up 80% of global transaction dollar amount in 2016. Amex, Discover and JCB combined made up 5%.

You may know of Amex but they are a very small card, especially outside of the US.

[0] https://nilsonreport.com/upload/issues/1109_6392.pdf

[mrep]

MasterCard and Visa, 2 seperate companies in the same space are "monopolies"? You literally just proved yourself wrong.

[sschueller]

MasterCard and Visa may be 2 companies but they have continued to violated antitrust laws and are in many cases acting like a single entity [1].

[1] https://www.bloomberg.com/news/articles/2018-09-18/visa-mast...

[Tehnix]

Do you also consider Google and Bing on the same footing?[0] No, right?. But in anycase, fair enough, the technical correct one is duopoly—the problem just is, it doesn't make it any better.

[0] https://www.statista.com/statistics/267161/market-share-of-s...

[mrep]

Oligopoly. Discover card and American Express are both mostly accepted (I say mostly because some companies don't accept American Express due to their charge back policies).

And yes, it makes it so much better. True monopolies can slack so hard and yet still rake in boatloads of cash because their customers have no other option. Google cannot sit around on their search engine or other companies will steal all their customers. Just look at how duck duck go is growing in popularity.

[stale2002]

And yet here we are, living in a world where PayPal, visa, and MasterCard are successful able to censor lots and lots of people.

So, by definition, this is a problem.

We would no longer have a problem if we get to the point where a single company censorsing your transactions is no big deal because a dozen others will immediately step up in their place.

But we don't live in that world, and so because of this we have to recognize that there is indeed an oligopoly problem.

[Tehnix]

> Oligopoly. Discover card and American Express are both mostly accepted

Duopoly when you are in Europe. Discover card and American Express is not really a thing here.

[projektfu]

Sometimes people say "monopoly" when they mean "cartel". Are you arguing that these companies do not have substantial market power compared to more competitive markets or are you just trying to distract from the discussion with an argument over definitions? Do we see Mastercard and Visa competing on price (e.g. interchange rates)?

[mrep]

Having 4 main companies (mastercard, visa, discover, and american express) doesn't make you a monopoly or cartel.

Obviously, they do have more market power than purely competitive environments but they do compete a lot on rewards which cut into the profitability of those interchange rates. I cannot find any source to measure the interchange fees - rewards profitability but I did find one that shows most of their profits don't come from those but instead interest rates [0] and I'd bet they don't make so much after the rewards (I get minimum 1% cash back on my cards and sometimes up to 5%).

[0]: https://www.fool.com/credit-cards/2017/04/13/this-is-how-cre...

[projektfu]

Rewards are entirely paid for by higher interchange rates. If a card is paying a 1% reward of some sort, it is also costing the merchant at least 1% more than non-reward cards at the interchange level. A lot of this is hidden by services like Stripe and Square that have flat fees for merchants (which are higher than any interchange fee) and also by processing ISOs that hide the interchange rates in their own synthetic flat fees. Nevertheless, the interchange rates are easily googled and differ somewhat based on merchant industry and size (market power again). Convenience stores successfully banded together and negotiated a lower rate for their industry. National-scale grocery chains also pay less. Again, not an example of a competitive market. The most effective means to cap rates has been legislation (e.g. the Durbin amendment and efforts in the EU.) because of the cartel-like behavior of the market participants to keep prices high and compete on "features".

[rlonstein]

The words 'oligopoly', 'cartel', and 'syndicate' are more appropriate.

[judge2020]

https://en.wikipedia.org/wiki/Oligopoly

[isoskeles]

Why quote the entire comment you’re replying to?

[ColinWright]

isoskeles> Why quote the entire comment you’re replying to?

Not the person of whom you're asking, but I sometimes quote substantial parts of text to which I'm replying for three basic reasons.

The first is that in a large thread if can sometimes be difficult to find the original. In that case it's useful to have the comment there, not least because if you want to see the original you have the exact text to search for.

The second is that in some other forums it's the usual behaviour, and when it's a habit, and regarded as a "Good Thing"(tm) in other forums, that behaviour can carry over. I find it a natural thing to do, and sometimes have to think twice to stop myself from doing it.

And thirdly, in the past I've seen replies that genuinely don't seem to make sense, only to discover subsequently that the original text was edited. I fully appreciate that on HN the unethical editing of text to make replies look stupid is not "A Thing"(tm) but it does make the habit a useful one.

[jocoda]

Let's not forget that entire HN threads can disappear too. Had a thread on which I make a comment disappear once.

[indigochill]

Can you expand on this line of reasoning a bit? Specifically, what's stopping a competitor from eating Paypal's lunch right now? They have a majority market share now, but disruption still seems a possibility. Often it seems would-be disruptors get bought by the goliaths, but that's on the owners of the disruptors making their company purchasable such as through accepting investor money.

On the flip side, if we did get new laws, why would the goliaths not use their country-size budgets to lobby for the laws to just ensconce them as the government-approved monopoly (maybe not directly, but for example by throwing up legislative barriers to entry against would-be competitors)?

[marcinzm]

>Specifically, what's stopping a competitor from eating Paypal's lunch right now?

There's already regulations (or industry rules) regarding money laundering, credit card processing, credit card charge backs, international money transfers, etc, etc. That alone creates a decent barrier to entry.

Then there's other issues such as merchants lying, customers lying, refunds, stolen accounts, etc. PayPal closes accounts (and so on) as a consequence of trying to deal with all these issues.

I'd posit that PayPal does not suck because it's PayPal but because of the product itself and anyone who tried to fully replicate it would run into the same issues (and thus suck just as much).

[barry-cotter]

Gee, if it’s that easy to find a new payment processor when Visa, MasterCard, PayPal, Stripe and four others all drop you on the same day SubscribeStar should have a new payment processor by now. They don’t. It’s been three weeks. No member of the payment processing cartel will touch you if MasterVisa won’t because then they’ll get you cut off.

https://twitter.com/nickmon1112/status/1076886857445711872?s...

Long twitter thread on the relation between MasterCard, Visa and Patreon and how the credit card cartel is attempting to minimise political risk.

[michaelt]

  Specifically, what's stopping a competitor
  from eating Paypal's lunch right now?

Perhaps being a payment processor is actually difficult, and Paypal is doing a tolerably good job?

I only hear people bitching about their paypal account being locked once or twice a year, whereas I assume paypal deal with hundreds of attempts at credit card fraud, chargebacks, complaints about ebay goods and suchlike every day.

[justtopost]

Oh, they deal with it. But always on terms favorible to them. I sold off inventory to my old CoLo and they froze all my funds for 6 months until lawyers got called, and somehow their fraud investigation magically vanished. They are no better than mafia.

[outoftheabyss]

Paypal relies heavily on mastercard and visa to process payments, if these companies refuse to play ball with a competitor (which I would say is incredibly likely given the cosy relationship these companies have) then what chance does a competitor have? Merely being usable is in Visa and master card's hands, let alone eating into any marketshare

[zarkov99]

Others comments have addressed the difficulties with creating a PayPal alternative. New laws would be vulnerable to corruption, yes, of course, but that is not a new problem and there are mechanisms to fight it. As things stand now we are fast and sleeply sliding back to the Rober Baron times as more and more of our lives are gated by a handfull of players.

[conanthe]

What free market are you talking about? There is no free market in the financial sector. Everything is regulated and licensed.

[nicc]

I don't know if we need new laws. We need more competitors, for sure.

Jordan Peterson (if you know him) has partnered to solve the problem of PayPal and Patreon deplatforming people, and is starting a competing service that doesn't depend on traditional payment circuits.

No one knows much about how it will work, but it might prove to be a good alternative to avoid being at the mercy of these companies.

[zarkov99]

For some reason, perhaps that they traffic in information, which is cheaply duplicated, perhaps because of network effects, tech businesses seem more prone to generate giant, seemingly invincible monopolies. Google, Facebook, Netflix, Amazon, Paypal, Youtube. Most people wouldn't be able to name a competitor to any of these, let alone use it. I do not know if competition, as is possible today, can work.

[nkkollaw]

Sure, but Patreon is for a small group of people. Meaning, the mass audience goes there because a small group of creators told them that's how they can support them.

If that small group of creators finds a better alternative, and tells their audience to support them at the alternative rather than Patreon, they will go there.

SubscribeStar was enjoying a good amount of success as a Patreon alternative once a few users who got banned move to it, (but then PayPal cut SubscribeStar off).

Only time can tell.

[zarkov99]

If the payment processors are really who is behind the Patreon/SubscribeStar debacle, which certainly seems to be the case, then short of bitcoin, which is a horrible solution, how can a Patreon competitor do any better?

[nkkollaw]

No idea! Maybe they'll be a middleman for Bitcoin.

We have to wait and see.