I'm not even going to read it because it is pointless. Making a PP is insanely hard on technical, legal, financial, insurance, compliance... level. That is not something you can do in a garage(just the PCI-DSS aspect is an astronomically hard to implement on its own and that is just a tiny pert of the whole thing, merely a set of rules and behaviors to enforce).
Heck, not even if you have millions in investment is this close to possible as there are so many things involved and insane amount of red tape that nowadays it is 10x harder than a decade ago and the cost of entry just keeps going up like with everything else related to online business.
But PPs are irrelevant. They are merely middlemen for the card companies so they can play neutral when in reality they are pushing their policies through PPs onto the customers. They just use PPs to shield themselves from the consequences of breaking the law by overstepping their legal boundaries.
I have been a strong critic of payment cards, payment processors and online payments for ages. This entire system is rotten to the core and I will dance on the grave of VISA and MasterCard when that day comes. Unfortunately, the banking industry is the most backwards, primitive , barely working sector in the entire market. They still live in the 1990s.
I am no fan of crypto as today it is being used as store of value(which it is not) instead of mechanism to transfer value(which it is). Once we finally move into the right direction, I know I'll have a good day.
PS: thanks to instant SEPA payments in EU, we no longer need payment cards to make online payments. But the shift in customer behavior will take time. But in the end, that is all that card companies provide - just a different interface for making a bank transfer. In today's digital world, that is no more complicated than making a phone call, yet we act like card payments are something special.
stego-tech · 10m ago
> I'm not even going to read it because it is pointless.
Reading it would’ve saved you the embarrassment of making a comment that effectively retreads the actual article in its entirety while also painting yourself in a negatively arrogant light.
This ain’t Reddit. RTA is advised before commenting.
mwenge · 29m ago
Well no, as a consumer you need to feel comfortable that you know how to get your money back if there's a problem with your purchase, as a merchant you need similar protections and a stable cost model, and as a bank you need an income model to cover all the costs and risks associated with processing the transaction. Moving the money is the easy part and is not the main set of problems that the card payment schemes have solved.
nebezb · 12m ago
> Moving the money is the easy part and is not the main set of problems that the card payment schemes have solved.
Nailed it. Anyone can move money.
As a consumer, I always opt to pay for credit card where available. The safeties provided to me facilitated by everyone in the network – from issuer to acquirer and everyone in between – is exactly why. I don't want to consider waiting 12 months in line at small claims to get back $200 sent over Interac for services that were never provided by a shoddy business owner.
The cost of those consumer safeties and convenience is incurred by the merchant. This is the cost of business.
latchkey · 7m ago
When you buy something from Amazon, who protects your purchases, Amazon or the credit card company?
This "insurance" could be offloaded to a neutral third party that isn't controlled by the credit cards. Often, you purchase additional protection insurance on your big ticket items. This could easily be extended to cover whatever credit cards would have been relied upon in the past.
gethly · 8m ago
There is no difference to the bank transfer(as that is what all of this is just wrapping inside). If you are paying with a debit card, you have the same "protections" as basic bank transfer. And from personal experience, the bank is near useless and you won't be even able to call your card company.
On the other hand, credit cards are something else. Those are essentially short-term loans that are insured. As there are many parties involved that profit from you use of these, there indeed is a lot of protection in this case. But credit cards are very niche part of online card payments and mostly it is a USA thing.
ronsor · 38m ago
> Making a PP is insanely hard on technical, legal, financial, insurance, compliance... level.
It's probably cheaper and easier to get your own country and then make your own regulations to avoid that stuff. That's how terrible it is.
burntpineapple · 2m ago
lol you’re being very dramatic, it could absolutely be done in a garage. Legacy orgs are held together with billions of dollars worth of last minute fixes and duct tape in the US
latchkey · 14m ago
> I am no fan of crypto as today it is being used as store of value(which it is not) instead of mechanism to transfer value(which it is). Once we finally move into the right direction, I know I'll have a good day.
People need and like to use credit, but they are doing it wrong by contributing to the "rotten" system. Crypto is a great store of value because you can use it as collateral to borrow against. Supply eth, borrow usdc, withdraw as usd. This is tax free since the conversion is 1:1 and there are no gains to report.
Instead of buying things with a credit card and paying it back every month, provide crypto as collateral, borrow against it and then pay it back. The difference is that this takes an upfront investment in order to get yourself started. Not too much different than the way credit works in SE Asia, since they time lock a deposit, to enable a debt card.
Maintaining your collateralization ratio (this answers the price volatility question) is no harder to do than paying the exorbitant fees to credit card companies for your balance. This could easily be wrapped into a nice UX. It would work globally and enable all sorts of great commerce. No more giving up all your information to the credit card companies. No more credit scores to get hacked either.
udev4096 · 34m ago
> today it is being used as store of value
Bitcoin is not the only currency. There are quite a lot of decent networks who offer quick transactions with almost no fees and is not a speculative currency
gethly · 2m ago
I never mentioned bitcoin and you are missing the point here. Cryptocurrency network is just a publicly available distributed ledger that records "financial" movements, these movements are denominated in the inherent cryptocurrency of the network. They are just units of measure but they themselves do not store any value. The world needs to start actually using crypto for payments, so you can exchange FIAT or precious metals for a crypto coin and then use it to buy groceries. It is just a means of exchange of value, not the value itself. The fact that people take it as store of value should necessitate a nee designation beyond the "retard" classification.
latchkey · 11m ago
Tokenized bitcoin is actually perfect for this. Bitcoin is otherwise, a useless pet rock and if you follow my comment above, it makes it useful, while also removing all the ESG arguments against bitcoin (because tokenized bitcoin is on eth and eth is PoS).
meagher · 29m ago
In 2018, Patreon almost got kicked off of Stripe because Mastercard objected to NSFW content (probably because of PACs and/or “moralizing busybodies”). Patreon booted most of the NSFW creators and OnlyFans scooped them up. OnlyFans is now significantly bigger than Patreon.
FinnKuhn · 10m ago
Just to add to this. OnlyFans also uses Stripe as their payment processor.
elric · 23m ago
American hate for wire transfers will never sound anything other than irrational to me. Why don't you have an equivalent of Europe's Instant Payments?
The author mentions the storefront pocketing the money, that seems implausible? If an unscrupulous storefront can pocket money that would be wired, it could also pocket money that would be paid by CC.
And then there's the weird thing about payment volumes...that's been a solved problem for half a century?
toast0 · 10m ago
US banking has wire transfers, but they cost $15-$40 and can only be reversed with the cooperation of the receiving bank. We use them to transfer large sums of money and for transfers that need to be settled immediately; most often for house purchases where both apply.
We do have ACH (single nightly batch), same day ACH (four? batches throughout the day), and the new FedNow (immediate). But all of those involve providing account numbers and we don't like to provide those. Also, there's not a consistent way to link a payment/debit with an invoice, because memo fields don't necessarily show up with the payment.
Also, credit card purchases can be reversed without the cooperation of the merchant. Most issuers are generous with chargebacks (at least historically). You could take a merchant to court if you did a wire transfer, but that's expensive and time consuming.
thfuran · 6m ago
>American hate for wire transfers will never sound anything other than irrational to me.
I'm assuming "wire transfer" means something different to you than what it means in America. In the US, a wire transfer is when you call up your bank, give them a routing number and account number, tell them to wire however much money to it, agree to pay like $20 or something for the transfer, and then they tell you the transfer will happen tomorrow morning because it's 3:30 PM and the last batch gets handled at 3:00. They're not so much hated as pretty much entirely irrelevant to everyone. I've made one wire transfer in my life, and that was for buying a house.
Esophagus4 · 8m ago
I’m going to assume this is a good faith comment, but I encourage you to understand the Europe and the US are different places, with significantly different ecosystems.
I also encourage you to read about Chesterton’s Fence. Make sure you understand why something exists before you think about how to replace it, then maybe you won’t see Americans’ use of credit cards as “irrational,” but instead, reasonable under the circumstances that exist.
That said… the US did roll out FedNow (similar to SEPA) but because the US banking ecosystem is more fragmented, adoption takes a while.
Wire transfers here are expensive and don’t provide consumer benefits (cash back, credit options, consumer protections like fraud and chargeback, or merchant coupons). In your example, if an unscrupulous store pockets the credit card payment, the credit card / issuer will often reimburse your purchase. (This is a law in the US.)
palmfacehn · 10m ago
>it could also pocket money that would be paid by CC.
No.
The card processor will return the customer's funds for various reasons. In many cases, "no reason" is sufficient for a chargeback, especially if you are dealing in intangibles, such as software licenses or digital media. In addition to returning the customer's funds, the merchant is typically penalized a "chargeback fee". This means as a merchant, if your chargeback fee is $25 and the product is $5, one chargeback can set you back 6 sales.
For these reasons, as well as other minimum rates, certain price levels are untenable. Consequently, many products are either not sold at all or sold at a much higher price.
The conditions make it more sensible for the merchant to sell high priced items to less troublesome customers. The percentage of the card processor's fees are relatively less. The probability of a chargeback is lower. As you have less customers, you can more easily provide support and contact them directly.
elric · 59s ago
In the case of fraud (like the article's example of a thieving storefront), banks can simply reverse the transfer. This is not an all-or-nothing deal where CCs are always safe because of theoretical chargebacks, and bank transfers are not.
Also: no-reason chargebacks are absolute BS. I worked on a PSP for a largeish adult entertainment business, and I remain convinced that most porn chargebacks are a case of "post nut clarity".
stego-tech · 46m ago
The solution to this issue is regulation, pure and simple. It doesn’t even have to be a complicated bill, either:
“Financial institutions and financial services providers are barred from blocking, interfering with, restricting, or refusing any consensual transaction that complies with laws regarding content, materials, goods, or services.”
Admittedly in the USA this tees up a 1A case over whether companies have freedom of speech (they shouldn’t), but in other jurisdictions it could be the game changer needed to unshackle commerce from the control of a handful of boardroom puritans and risk-adverse compliance departments. If porn has a high rate of chargebacks, then stop allowing them without a higher burden of proof on the person requesting them, for instance. There’s ample room to enforce accountability on consumers and processors without upending the proverbial produce cart.
dlcarrier · 33m ago
Unfortunately the US has a history of doing the opposite, and using regulation of payment processors to prevent them from allowing some business to operate, when the Constitution doesn't allow the federal government to directly limit those businesses: https://en.wikipedia.org/wiki/Unlawful_Internet_Gambling_Enf...
greatgib · 6m ago
Just to be noted, we are in this situation especially because there are a lot of terrible regulation in banking that force them to police every single use of your money or take very big risks.
landl0rd · 33m ago
There are two main reasons companies will block types of payments: material downside, like high chargeback risk, and reputational damage. It completely makes sense that certain things should be relegated to working with pmt processors who have structures designed to manage and be compensated for that risk. We shouldn’t socialize those costs onto the processors or, via higher fees, everyone who accepts credit cards. Instead, we should expect the companies who engage in those activities to shoulder their own burdens rather than pushing that risk off to others.
9dev · 42m ago
Instead of tailoring this to financial service providers, create conditions for essential service operators that must ensure service delivery neutrality. That way, the legislation applies to all kinds of infrastructural services, and you don’t even open up the can of worms that is freedom of speech, since the affected companies don’t get to have a say in who they want to do business with.
stego-tech · 12m ago
For the US specifically (I can’t speak to other countries), that could be an excellent use case for the USPS: digital money orders. Pay with cash or debit card at the post office, claim it back to a bank account. Other postal services could reciprocate/honor those orders in that specific currency (or offer conversion at a publicized daily rate). Since it’s cash only (no credit), it significantly reduces chargebacks - and because it’s through national postal services, it still allows checking/tracking by governments to keep tabs on illicit transactions.
Thing is, that would absolutely be blocked by current payment providers and their lobbyists. I fully agree with you, though.
Shank · 25m ago
I think you really need to make a card that isn’t a Visa or MasterCard or a QR payments system that’s wired to common banks. I don’t think anyone has suggested creating a payment processor without this, because the issue is with Visa/MasterCard, not with the middleman.
I think Valve could actually find a bank to work with to run a QR payments scheme for the gaming industry (SteamPay perhaps?) that’s “topped up” via ACH. Just ignore the whole card part, since it’s online you don’t even need it. Require biometrics and you can make the fraud burden easier.
Of course this would cost a lot of money, but it’s at least in the realm of possible versus a PayFac etc.
sschueller · 26m ago
The only correct solution is something like the Brasilian pix. No fee paid for by taxes and the central bank just like the management of cash.
A digital alternative to cash offered by the central banks which are the ones responsible to enable financial transactions. Since so many are moving to cashless it is important for the central bank to retain control of the currency alternative to cash.
We can not allow this explosion of middle men all taking a cut of something they should not be part off especially since they now have such power that they decide what you can and cannot buy instead of the laws of the land.
Voultapher · 5m ago
Yep. The EU has also enacted various regulations to enable cheap bank to bank transfers and online payments but pix seems even better - haven't use it though. 3% transaction fees are ridiculous and only possible because Visa/MC have successfully - until now - lobbied against any good alternative in the US.
Privatizing water supply is an awful deal for citizen - ask the UK - since the incentives are anti-consumer and public infrastructure is more often than not a monopoly by definition. I'd count transferring money online as public infrastructure and it should get the same treatment.
c0balt · 45m ago
That was an interesting read. The core issue unfortunately appears to boil down to being a deeply complex of net of trast and risk distribution.
The issue being a "human"/societal problem, instead of technology, makes me wonder if this could be slowly changed over a few generations. The amount of momentum required would be quite high tough.
FinnKuhn · 1h ago
While I'm not the biggest fan of crypto overall this is definitely one instance where you could actually use it in a way that makes sense by offering people to pay with it instead. Only issue is converting it afterwards into fiat currency.
kaishiro · 53m ago
That's not actually the only issue, unfortunately. Steam did in fact accept Bitcoin for a while, but it was dropped in 2017, with Newell stating:
> “We had problems when we started accepting cryptocurrencies as a payment option. 50% of those transactions were fraudulent, which is a mind-boggling number. These were customers we didn’t want to have.” [1]
That's quite interesting, I wonder how they were fraudulent as bitcoin transactions dont have chargebacks etc. In the article they also mention that the price for the game would fluctuate which seems to indicate they actually priced the games in Bitcoin. Normally price would be Euro, USD etc and price conversion to Bitcoin would be done at check out. I guess these were the early days though =)
udev4096 · 40m ago
2017 was definitely not early. Bitcoin gained a lot of traction since 2014
hippich · 29m ago
While volatility indeed can be a problem (depending on how the whole thing is setup), I fail to come up with scenario of 50% fraudulent transactions... Does anyone have links to more details on what kind of fraud they meant?
Seems like a catch-22. Crypto can’t be used like legitimate currency because it’s not used like legitimate currency, and fraud can’t be addressed because there’s no regulation and no mechanisms by which to make victims whole.
There are parts of me that can see some appeal in cryptocurrency but I can’t see any way around this, at least not without impacting what made it appealing in the first place.
AlienRobot · 36m ago
I think this is the biggest problem with crypto that it will never be able to solve. Every year there are millions of dollars lost in crypto due to scams (the "send me crypto and I'll give you money" kind). The instant you have a digital good people can actually buy with crypto and sell for real money, it becomes a money laundering machine.
Like you could get money from ransomware, buy a ton of games on steam, then sell the account to a third party.
udev4096 · 41m ago
That's a lie. How can you even make a fraudulent bitcoin transaction?
Who in their right mind would not wait for at least 2-3 confirmations before approving the transaction? It sounds like a skill issue
victorbjorklund · 16m ago
Fraudlent is accoriding to the law. If I steal your bitcoin I spend them on Steam it is fraudlent. I know cryptobros think stealing bitcoins are OK and shouldnt count as fraud but law isnt written by cryptobros.
Almondsetat · 52m ago
If you like fake money, we have that already: Steam wallet cards
tonyhart7 · 56m ago
"I'm not the biggest fan of crypto"
You know crypto is mainstream and already here when US president literally launched his own coin
times changes old man
FinnKuhn · 12m ago
None of that has anything to do with me liking it. There are enough things that are mainstream that you probably don't like either.
bob1029 · 58m ago
> In short, just making your own payment processor is hilariously difficult and far beyond the means of Valve let alone Itch. Depending on what the speaker means by "Payment Processor", they may be suggesting making your own bank, or somehow convincing a bank to let Itch shove payments through them; who will eventually do the exact same thing as what happened here. There's no winning play there.
PCI-DSS compliance wasn't even mentioned and it is easily able to overwhelm organizations like Valve and Itch on its own. The hardest part of payment processing is the network. Connecting the acquirers to the issuers in such a way that everyone is happy with the arrangement. Just like the hardest part of the power grid is the transmission infrastructure. The endpoints are far more trivial to replace. If you want to use the existing network, you have to play by all of the rules. The only real way out of this system is to use a completely different kind of currency.
debo_ · 36m ago
I've built a payfac before, and while I think this author is overstating the difficulty of doing so in 2025, I agree that it wouldn't help Valve to do so. We weren't the ones that decided it was too risky to deal with specific merchant categories; our processor did that for us. It wasn't even a discussion. (Nevermind such policies like "all of Puerto Rico is too risky to deal with.")
NoahZuniga · 28m ago
> If you're making your own PayFac, you're suddenly responsible for getting and securely storing that information and handing it up to your sponsoring Acquirer. You're also responsible for verifying it, ...
My understanding is that steam already has to do this? Like when I buy a game on steam it goes to steam, who then redistributes the funds to themselves, developer and tax man. Since they are holding the money, are they not defacto already a Payment Facilitator?
Crackula · 26m ago
afaik games are not considered money. and steam points are not considered money either. only withdrawable credits (casinos/online payment apps) are considered as money
Shank · 24m ago
Steam pays developers their cut from sales, which is probably what they’re referring to.
elevenoh4 · 1h ago
there's an avalanche of money waiting for more competition to Stripe
i've seen too many businesses destroyed by sudden "your account is closed" with no human contact
Keyframe · 50m ago
If it's as difficult as they say it is, how did Stripe do it?
danielmarkbruce · 41m ago
They worked at it for a long time before launch, started with a very narrow product and only had customers they actually knew (reduces fraud a lot), worked like crazy, operated in a market where the competition was abysmal.
danielmarkbruce · 41m ago
There's an avalanche of money waiting for more competition to Nvidia too....
The problem is, many folks have absolutely no comprehension of how difficult it is to build a payment processor that can serve lots of customers they don't personally know. The fraud is just insane. The regulation is insane. The card network rules are insane.
palmfacehn · 21m ago
Cryptocurrencies are many different things to different people. Putting aside the speculative mania, the payment processor problem is one of the main problems private cryptocurrencies solve.
Stablecoins are not without issues, but they've largely solved the problem of price volatility. Objections around issuance and backing might be raised, but this is more interesting for trading and less relevant for merchant transactions.
Yes, there are no chargebacks with cryptocurrencies. This is an advantage for the merchant. Before anyone goes off the deep end here, let's recall the context of the discussion: one time payments to reputable merchants for trivial amounts. Game purchases do not require life changing amounts of currency to change hands. Steam and Itch are well known brands.
So what is left to object to? My impression is that there is excessive cultural and political baggage.
From the article:
>Capitalism sucks. The economic ecosystem sucks. People unrelated to transactions in any way except "They have the tech to facilitate them" deciding that entire industries don't get to make money and feed their staff because "It's risky to handle these payments" suck. That these entities can also be attacked by PACs and shamed into being the morality police sucks.
...
>But I still hate crypto.
Note that even though the author correctly observes the high regulatory overhead and political, non-market forces, they still manage to blame "Capitalism".
throwanem · 1h ago
So Valve buys Itch cheap in a year or two?
udev4096 · 36m ago
> Crypto: lmao
What is that supposed to even mean? There is no central authority. You are your own bank. Grow up, POW is necessary to keep the network secure
Heck, not even if you have millions in investment is this close to possible as there are so many things involved and insane amount of red tape that nowadays it is 10x harder than a decade ago and the cost of entry just keeps going up like with everything else related to online business.
But PPs are irrelevant. They are merely middlemen for the card companies so they can play neutral when in reality they are pushing their policies through PPs onto the customers. They just use PPs to shield themselves from the consequences of breaking the law by overstepping their legal boundaries.
I have been a strong critic of payment cards, payment processors and online payments for ages. This entire system is rotten to the core and I will dance on the grave of VISA and MasterCard when that day comes. Unfortunately, the banking industry is the most backwards, primitive , barely working sector in the entire market. They still live in the 1990s.
I am no fan of crypto as today it is being used as store of value(which it is not) instead of mechanism to transfer value(which it is). Once we finally move into the right direction, I know I'll have a good day.
PS: thanks to instant SEPA payments in EU, we no longer need payment cards to make online payments. But the shift in customer behavior will take time. But in the end, that is all that card companies provide - just a different interface for making a bank transfer. In today's digital world, that is no more complicated than making a phone call, yet we act like card payments are something special.
Reading it would’ve saved you the embarrassment of making a comment that effectively retreads the actual article in its entirety while also painting yourself in a negatively arrogant light.
This ain’t Reddit. RTA is advised before commenting.
Nailed it. Anyone can move money.
As a consumer, I always opt to pay for credit card where available. The safeties provided to me facilitated by everyone in the network – from issuer to acquirer and everyone in between – is exactly why. I don't want to consider waiting 12 months in line at small claims to get back $200 sent over Interac for services that were never provided by a shoddy business owner.
The cost of those consumer safeties and convenience is incurred by the merchant. This is the cost of business.
This "insurance" could be offloaded to a neutral third party that isn't controlled by the credit cards. Often, you purchase additional protection insurance on your big ticket items. This could easily be extended to cover whatever credit cards would have been relied upon in the past.
On the other hand, credit cards are something else. Those are essentially short-term loans that are insured. As there are many parties involved that profit from you use of these, there indeed is a lot of protection in this case. But credit cards are very niche part of online card payments and mostly it is a USA thing.
It's probably cheaper and easier to get your own country and then make your own regulations to avoid that stuff. That's how terrible it is.
People need and like to use credit, but they are doing it wrong by contributing to the "rotten" system. Crypto is a great store of value because you can use it as collateral to borrow against. Supply eth, borrow usdc, withdraw as usd. This is tax free since the conversion is 1:1 and there are no gains to report.
Instead of buying things with a credit card and paying it back every month, provide crypto as collateral, borrow against it and then pay it back. The difference is that this takes an upfront investment in order to get yourself started. Not too much different than the way credit works in SE Asia, since they time lock a deposit, to enable a debt card.
Maintaining your collateralization ratio (this answers the price volatility question) is no harder to do than paying the exorbitant fees to credit card companies for your balance. This could easily be wrapped into a nice UX. It would work globally and enable all sorts of great commerce. No more giving up all your information to the credit card companies. No more credit scores to get hacked either.
Bitcoin is not the only currency. There are quite a lot of decent networks who offer quick transactions with almost no fees and is not a speculative currency
The author mentions the storefront pocketing the money, that seems implausible? If an unscrupulous storefront can pocket money that would be wired, it could also pocket money that would be paid by CC.
And then there's the weird thing about payment volumes...that's been a solved problem for half a century?
We do have ACH (single nightly batch), same day ACH (four? batches throughout the day), and the new FedNow (immediate). But all of those involve providing account numbers and we don't like to provide those. Also, there's not a consistent way to link a payment/debit with an invoice, because memo fields don't necessarily show up with the payment.
Also, credit card purchases can be reversed without the cooperation of the merchant. Most issuers are generous with chargebacks (at least historically). You could take a merchant to court if you did a wire transfer, but that's expensive and time consuming.
I'm assuming "wire transfer" means something different to you than what it means in America. In the US, a wire transfer is when you call up your bank, give them a routing number and account number, tell them to wire however much money to it, agree to pay like $20 or something for the transfer, and then they tell you the transfer will happen tomorrow morning because it's 3:30 PM and the last batch gets handled at 3:00. They're not so much hated as pretty much entirely irrelevant to everyone. I've made one wire transfer in my life, and that was for buying a house.
I also encourage you to read about Chesterton’s Fence. Make sure you understand why something exists before you think about how to replace it, then maybe you won’t see Americans’ use of credit cards as “irrational,” but instead, reasonable under the circumstances that exist.
That said… the US did roll out FedNow (similar to SEPA) but because the US banking ecosystem is more fragmented, adoption takes a while.
Wire transfers here are expensive and don’t provide consumer benefits (cash back, credit options, consumer protections like fraud and chargeback, or merchant coupons). In your example, if an unscrupulous store pockets the credit card payment, the credit card / issuer will often reimburse your purchase. (This is a law in the US.)
No.
The card processor will return the customer's funds for various reasons. In many cases, "no reason" is sufficient for a chargeback, especially if you are dealing in intangibles, such as software licenses or digital media. In addition to returning the customer's funds, the merchant is typically penalized a "chargeback fee". This means as a merchant, if your chargeback fee is $25 and the product is $5, one chargeback can set you back 6 sales.
For these reasons, as well as other minimum rates, certain price levels are untenable. Consequently, many products are either not sold at all or sold at a much higher price.
The conditions make it more sensible for the merchant to sell high priced items to less troublesome customers. The percentage of the card processor's fees are relatively less. The probability of a chargeback is lower. As you have less customers, you can more easily provide support and contact them directly.
Also: no-reason chargebacks are absolute BS. I worked on a PSP for a largeish adult entertainment business, and I remain convinced that most porn chargebacks are a case of "post nut clarity".
“Financial institutions and financial services providers are barred from blocking, interfering with, restricting, or refusing any consensual transaction that complies with laws regarding content, materials, goods, or services.”
Admittedly in the USA this tees up a 1A case over whether companies have freedom of speech (they shouldn’t), but in other jurisdictions it could be the game changer needed to unshackle commerce from the control of a handful of boardroom puritans and risk-adverse compliance departments. If porn has a high rate of chargebacks, then stop allowing them without a higher burden of proof on the person requesting them, for instance. There’s ample room to enforce accountability on consumers and processors without upending the proverbial produce cart.
Thing is, that would absolutely be blocked by current payment providers and their lobbyists. I fully agree with you, though.
I think Valve could actually find a bank to work with to run a QR payments scheme for the gaming industry (SteamPay perhaps?) that’s “topped up” via ACH. Just ignore the whole card part, since it’s online you don’t even need it. Require biometrics and you can make the fraud burden easier.
Of course this would cost a lot of money, but it’s at least in the realm of possible versus a PayFac etc.
A digital alternative to cash offered by the central banks which are the ones responsible to enable financial transactions. Since so many are moving to cashless it is important for the central bank to retain control of the currency alternative to cash.
We can not allow this explosion of middle men all taking a cut of something they should not be part off especially since they now have such power that they decide what you can and cannot buy instead of the laws of the land.
Privatizing water supply is an awful deal for citizen - ask the UK - since the incentives are anti-consumer and public infrastructure is more often than not a monopoly by definition. I'd count transferring money online as public infrastructure and it should get the same treatment.
The issue being a "human"/societal problem, instead of technology, makes me wonder if this could be slowly changed over a few generations. The amount of momentum required would be quite high tough.
> “We had problems when we started accepting cryptocurrencies as a payment option. 50% of those transactions were fraudulent, which is a mind-boggling number. These were customers we didn’t want to have.” [1]
[1] https://finance.yahoo.com/news/steam-co-founder-reveals-why-...
There are parts of me that can see some appeal in cryptocurrency but I can’t see any way around this, at least not without impacting what made it appealing in the first place.
Like you could get money from ransomware, buy a ton of games on steam, then sell the account to a third party.
You know crypto is mainstream and already here when US president literally launched his own coin
times changes old man
PCI-DSS compliance wasn't even mentioned and it is easily able to overwhelm organizations like Valve and Itch on its own. The hardest part of payment processing is the network. Connecting the acquirers to the issuers in such a way that everyone is happy with the arrangement. Just like the hardest part of the power grid is the transmission infrastructure. The endpoints are far more trivial to replace. If you want to use the existing network, you have to play by all of the rules. The only real way out of this system is to use a completely different kind of currency.
My understanding is that steam already has to do this? Like when I buy a game on steam it goes to steam, who then redistributes the funds to themselves, developer and tax man. Since they are holding the money, are they not defacto already a Payment Facilitator?
i've seen too many businesses destroyed by sudden "your account is closed" with no human contact
The problem is, many folks have absolutely no comprehension of how difficult it is to build a payment processor that can serve lots of customers they don't personally know. The fraud is just insane. The regulation is insane. The card network rules are insane.
Stablecoins are not without issues, but they've largely solved the problem of price volatility. Objections around issuance and backing might be raised, but this is more interesting for trading and less relevant for merchant transactions.
Yes, there are no chargebacks with cryptocurrencies. This is an advantage for the merchant. Before anyone goes off the deep end here, let's recall the context of the discussion: one time payments to reputable merchants for trivial amounts. Game purchases do not require life changing amounts of currency to change hands. Steam and Itch are well known brands.
So what is left to object to? My impression is that there is excessive cultural and political baggage.
From the article:
>Capitalism sucks. The economic ecosystem sucks. People unrelated to transactions in any way except "They have the tech to facilitate them" deciding that entire industries don't get to make money and feed their staff because "It's risky to handle these payments" suck. That these entities can also be attacked by PACs and shamed into being the morality police sucks.
...
>But I still hate crypto.
Note that even though the author correctly observes the high regulatory overhead and political, non-market forces, they still manage to blame "Capitalism".
What is that supposed to even mean? There is no central authority. You are your own bank. Grow up, POW is necessary to keep the network secure
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