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The cashback you are given back is taken from a fraction of the fee levied on merchants by the Payment Processing company they use. The only thing holding this

The cashback you are given back is taken from a fraction of the fee levied on merchants by the Payment Processing company they use. The only thing holding this system together is the lobby (also funded by a part of the aforementioned fee on merchants) by the Payment Processing industry to uphold laws that prohibit more expensive payments for more expensive payment methods, and also the extensive marketing (funded by guess what). It's an extremely simple yet ingrained system, and the only way to topple it and stop paying hidden costs thinking you're getting an extremely good deal on cashback, is to peel back the curtains and realize it, and make most of the politically-active part of the country's population to do so too.

ivape 1y ago
But, who do you get to call in a world like that? I think the West really likes customer service and security.
- henry700 1y ago
  Suspicious transactions are a legitimate use-case for payment processing. If you don't fully trust who you're buying from, the scam preventions, chargebacks, refunds etc. work fine. But buying lunch or small chocolates, cigarretes etc with credit cards is INSANE.
- miltava 1y ago
  Why do you think PIX doesn’t have customer service or security? It’s regulated by the central bank but operated by private companies.
brainwad 1y ago
Credit card isn't more expensive than its main competitor, cash, though. It's just the costs of credit card acceptance are transparently added to each transaction, while the costs of cash are distributed over the whole day's cash transactions and so more opaque. Merchants have a psychological (and in some countries, legal) barrier to charging more for cash than other payment methods, even though it's the least efficient. Given this, cash-back is the best way to share the efficiency gains with the end user. Maybe if Pix or Twint or debit cards or what-have-you are so efficient, they should also give consumers cashback.
- miltava 1y ago
  It could give cashback if it cost 3% of the transaction. But it’s it’s actually much cheaper. For credit cards you have to pay for the brand, the issuer and the acquirer. And each gets a nice cut.
  - brainwad 1y ago
    Reducing merchant fees seems like a mistake if you are in competition with both cash (which has high intrinsic merchant costs) and credit cards (which has low intrinsic costs, but which are padded so they're closer to the costs of cash, with consumer cashback coming out of this padding). I'm certainly not going to _choose_ to receive less cashback, as a consumer.
    - disgruntledphd2 1y ago
      I mean, the cashback is paid for out of the fees you pay for the service. In a world with low capped charges (EU etc) then you'll just pay less, which is equivalent to cashback and much fairer.
      - brainwad 1y ago
        So long as the price is the same for cash and card (and Pix?), then you should pick the one that gives you the best kickbacks. I don't think capping CC fees will actually lower prices for consumers much (because merchants prefer round prices for psychological pricing). For evidence, see the fairly uniform pricing of products sold in euros between countries, despite varying vat rates between eurozone countries.
        disgruntledphd2 1y ago
        > see the fairly uniform pricing of products sold in euros between countries, despite varying vat rates between eurozone countries. Huh, not sure I agree with that (the uniform pricing thing). I mean, one should believe that, but it doesn't appear to be true. For example, recently I saw a tablet for 208 euro (converted from GBP) on amazon.co.uk, approx 220 euro from amazon.de and 360 euro from amazon.ie, for the same item. I was really surprised because I figured electronics would be pretty similarly priced across the EU/UK, but apparently not.

ivape 1y ago

But, who do you get to call in a world like that? I think the West really likes customer service and security.

henry700 1y ago
Suspicious transactions are a legitimate use-case for payment processing. If you don't fully trust who you're buying from, the scam preventions, chargebacks, refunds etc. work fine. But buying lunch or small chocolates, cigarretes etc with credit cards is INSANE.
miltava 1y ago
Why do you think PIX doesn’t have customer service or security? It’s regulated by the central bank but operated by private companies.

brainwad 1y ago

Credit card isn't more expensive than its main competitor, cash, though. It's just the costs of credit card acceptance are transparently added to each transaction, while the costs of cash are distributed over the whole day's cash transactions and so more opaque. Merchants have a psychological (and in some countries, legal) barrier to charging more for cash than other payment methods, even though it's the least efficient. Given this, cash-back is the best way to share the efficiency gains with the end user. Maybe if Pix or Twint or debit cards or what-have-you are so efficient, they should also give consumers cashback.

miltava 1y ago
It could give cashback if it cost 3% of the transaction. But it’s it’s actually much cheaper. For credit cards you have to pay for the brand, the issuer and the acquirer. And each gets a nice cut.
- brainwad 1y ago
  Reducing merchant fees seems like a mistake if you are in competition with both cash (which has high intrinsic merchant costs) and credit cards (which has low intrinsic costs, but which are padded so they're closer to the costs of cash, with consumer cashback coming out of this padding). I'm certainly not going to _choose_ to receive less cashback, as a consumer.
  - disgruntledphd2 1y ago
    I mean, the cashback is paid for out of the fees you pay for the service. In a world with low capped charges (EU etc) then you'll just pay less, which is equivalent to cashback and much fairer.
    - brainwad 1y ago
      So long as the price is the same for cash and card (and Pix?), then you should pick the one that gives you the best kickbacks. I don't think capping CC fees will actually lower prices for consumers much (because merchants prefer round prices for psychological pricing). For evidence, see the fairly uniform pricing of products sold in euros between countries, despite varying vat rates between eurozone countries.
      - disgruntledphd2 1y ago
        > see the fairly uniform pricing of products sold in euros between countries, despite varying vat rates between eurozone countries. Huh, not sure I agree with that (the uniform pricing thing). I mean, one should believe that, but it doesn't appear to be true. For example, recently I saw a tablet for 208 euro (converted from GBP) on amazon.co.uk, approx 220 euro from amazon.de and 360 euro from amazon.ie, for the same item. I was really surprised because I figured electronics would be pretty similarly priced across the EU/UK, but apparently not.