"Personally I think they should not be able to decide such things. A payment provider should be forced to accept all legitimate customers."
Payment providers are companies. They should be able to decide what they'll cover or not. In this case the bigger issue is that you essentially have a duopoly that allows 2 companies to affect the market with those decisions.
Power companies, water companies, natural gas, heating oil companies, telephone companies are also private companies, that we classify as utilities because they are essential. They aren't allowed to discriminate at all. In 2022, I think credit cards should be viewed as a utility, as well as the internet itself. It's very difficult to live without either in the US and a lot of the world.
I would potentially even go further than that. I think governments should make their own (digital) card payment systems that work like cash. Ie they should be as anonymous as cash and would have to serve all customers. This would have drawbacks in cases of fraud, but it could then be used exactly like cash is, but with less inefficiency.
I would go even further and say that governments should get out of the business of issuing cash. Especially having a monopoly on issuing cash.
(For this proposal in eg the US, the Fed can still control the money supply. It's just that banks would print their own cash; exactly like they mint their own account balances that you can use to pay with already.)
Wouldn’t that just cause a massive amount of confusion over what was legal cash and what exchange rates are? One of the economic strengths of the US is its unified currency which has been poorly copied by the euro.
A provably anonymous and untraceable digital currency backed by a government would see instant adoption. Before anyone complains about catching baddies just remember that serious criminals will astutely avoid any traceable currency or will find ways to launder it, only law abiding citizens and bunglers will be caught up in a surveillance state. The corrupt and criminal will remain as free as ever.
> Wouldn’t that just cause a massive amount of confusion over what was legal cash and what exchange rates are?
In practice, this has never been a problem, when it was tried historically.
What typically happens is that the different vendors standardize on a common unit of account (eg Pound Sterling in Scotland or Canadian Dollars in Canada, both of which were defined as a particular amount of some precious metals).
Typically issuers will redeem not only their own notes, but also accept other vendors notes at par---as long as that vendor is known to be solvent.
(The US was an exception to the latter, owing to their widespread bans on banks having more than a single office.)
The situation was pretty similar to how bank accounts still work today: if you have a dollar in an account at bank A, bank B will typically accept a transfer at par.
If someone is trying to pay you, you only need to know whether your own bank accepts the notes in question (or respectively whether your own bank accepts a wire transfer from their bank).
> One of the economic strengths of the US is its unified currency which has been poorly copied by the euro.
That was also a global strength during the gold standard. Common acceptance at par is enough for this. It's not necessary for everyone to use the same brand of currency.
George Selgin's book 'Good Money' is especially interesting. It's about Britain during the Industrial Revolution when the Royal Mint refused to mint enough small coins for factory owners to pay their staff. So some factory owners made their own coins (redeemable in demand into Pound Sterling).
There was this pedophile in my neighborhood that received water, gas and heating from companies. People were upset because without water he wouldn't have been able to become a pedophile
The difference is that you have one electric line to your house (often via infrastructure controlled bh the municipality), but you do have the option to hold credit cards from various providers. The issue is that antitrust isn't being enforced.
More often than not, antitrust laws are used by the side who can afford lawyers to inconvenience the competition.
A more straightforward approach would be to lower barriers to entry. Both for startups but also, and probably more importantly, for companies from other industries and other countries who want to branch out.
At one point, Walmart wanted to become a bank in the US. The existing banks lobbied hard against that and prevailed. Say what you want about Walmart, but that would have been a breath of fresh air for retail customers and much needed real competition.
And we should strive to minimize what companies need to be classified as utilities.
Eg these days it doesn't make much sense anymore to classify phone companies as utilities.
> In 2022, I think credit cards should be viewed as a utility, as well as the internet itself. It's very difficult to live without either in the US and a lot of the world.
It's also difficult to live without food, or without an apartment. That doesn't mean providers of either of these should be treated as utilities.
Btw, I never had a credit card in my life and don't intend to get one. It's perfectly possible to live without them. (But that's only a minor and pedantic quibble: I agree that it is hard to avoid the major payment processors like Visa and MasterCard. I just happen to use them via debit cards, not credit cards.)
I take phone company in this case includes ISPs and mobile providers. And I would say that those are the most important utilities in this age. Even more so than water and electricity.
The difference is that power companies aren't liable when their services are used to distribute child porn. This is the problem with cancel culture. Without any external pressure, there is no reason for Visa and Mastercard to care about regulating porn at all because that's creating an unnecessary cost center for the sole purpose of rejecting revenue sources. In these sort of cases, a group of busybodies, which can be anyone from politicians to keyboard warriors, want to cancel something, but are too uncreative and lazy create a set of standards and moderate the content themselves. Instead, they choose to pressure those in their reach to act, which in this case is Visa and Mastercard. This way, Visa and Mastercard receive all the backlash to the rules instead of themselves. Don't blame the companies for responding to market incentives. Blame the people who are creating them. This applies basically for all forms of internet censorship (e.g. Youtube).
If “cancel culture” is even one-tenth as effective at influencing the credit card duopoly’s polices as you think, how is it that Donald Trump is still accepting credit card donations?
I'm referring to cancel culture as a tool, not an ideology.
Visa actually did temporary halt political donations, so they were definitely entertaining the idea. However, they aren't really threatened by activists because nobody is going to stop using their credit card because Visa processes donations to Trump. Internet companies are much more vulnerable to activists, who can bring enough bad negative attention to dissuade companies from advertising on a platform.
In Visa and MasterCard's case, it's likely regulators or politicians pressuring them.
> Payment providers are companies. They should be able to decide what they'll cover or not
Companies exist to provide people with goods and services. They have no inalienable rights beyond that. If a company does so in a way we see as unacceptable (in this case discriminatory), we have the right to force it and the only rights it has are to comply or cease operation.
> In this case the bigger issue is that you essentially have a duopoly that allows 2 companies to affect the market with those decisions.
Yes, everyone know that's an issue. The solution, obviously, is to limit their ability to manipulate. We can achieve a big part pf this this by forcing them to serve everyone equally.
>Why don't we force all companies to do this then?
Because this can end up adding a barrier to entry for new businesses, especially in new niches. However, I think once any company becomes large enough then this should apply to them.
I feel like in today's world they are also kind of utilities. This is where the trouble starts. If you want to run a business these days (especially online) you need a payment provider in many cases, and pretty much always need a bank account.
> They should be able to decide what they'll cover or not.
Why? Companies can be regulated. In cases where there isn't effective competition providing real consumer choice, I think it's perfectly reasonable to regulate them in the manner suggested.
If there is not enough competition, the problem is one of two things:
* barriers to entry created by regulatory restrictions
* a naturally monopolistic industry creating a tendency toward monopoly/oligopoly
In the case of the former, the govermment should simply repeal the regulatory restrictions.
In the case of the latter, the government should directly provision a public option, until that public option becomes the de facto monopoly. With blockchain technology, the government could even subsidize the development of public good smart contracts that enable participants to coordinate, without an intermediary, to provide the good/service in question.
I don't see any moral justification for allowing private citizens to build their own successful enterprise, and then seizing control over the enterprise to dictate how it is utilized.
That's an exaggeration. For example, we already require companies to serve disabled customers. They can't just choose to refuse service to them. Have we already "seized control" over these companies? I don't think so. Nor would it be the case with this proposal.
>>Have we already "seized control" over these companies?
Yes, the government has. It just allots them quite a bit of liberty over how those companies are managed.
Fundamentally, once the state dictates how the property may be used in private interaction, it has abrogated the right of the nominal owner to their private property.
> Payment providers are companies. They should be able to decide what they'll cover or not.
Legislation in other industries ensures that companies are not allowed to decide what they cover or not, because when companies pick and choose it leaves parts of the market being under-served (as is happening here).
As an example - Under the Affordable Care Act, health insurance companies in the USA can't refuse to cover you or charge you more just because you have a “pre-existing condition”.
Or as another example, the idea of net neutrality.
> Payment providers are companies. They should be able to decide what they'll cover or not.
Restaurants are companies, but that doesn't mean they can stir shit into the food. There's no law, rule, or ethical principle that says that companies cannot be regulated.
I'm not sure how stirring shit into food is analogous, but restaurants, like payment providers, are allowed to refuse service to people in many different situations.
And disallowed from refusing service to people in many other situations, just as they are disallowed from stirring shit into food. That we tell businesses what they can and can't do is a fact, so it's:
1) useful to discuss whether or not we should allow or disallow things, and
2) useless to discuss whether private business can do whatever they want because they are private businesses. The answer to that is that private businesses can't do what they want, instead they're allowed to do what we haven't told them they can't do, and must do what we've told them they must do.
Payment providers are companies. They should be able to decide what they'll cover or not. In this case the bigger issue is that you essentially have a duopoly that allows 2 companies to affect the market with those decisions.