<story><title>Visa, Mastercard mull increasing fees for processing transactions: WSJ</title><url>https://www.reuters.com/article/us-paymentprocessors-fees/visa-mastercard-mull-increasing-fees-for-processing-transactions-wsj-idUSKCN1Q41ME</url></story><parent_chain><item><author>tome</author><text>Is it a cosmic coincidence that these two large competitors are going to increase fees at exactly the same time?</text></item></parent_chain><comment><author>dontbenebby</author><text>Your comment reminds me of a recent article I read (on HN iirc but can&amp;#x27;t find the comment thread):&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.technologyreview.com&amp;#x2F;the-download&amp;#x2F;612947&amp;#x2F;pricing-algorithms-can-learn-to-collude-with-each-other-to-raise-prices&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.technologyreview.com&amp;#x2F;the-download&amp;#x2F;612947&amp;#x2F;pricing...&lt;/a&gt;&lt;p&gt;&amp;gt;&lt;i&gt;Researchers at the University of Bologna in Italy created two simple reinforcement-learning-based pricing algorithms and set them loose in a controlled environment. They discovered that the two completely autonomous algorithms learned to respond to one another’s behavior and quickly pulled the price of goods above where it would have been had either operated alone.&lt;/i&gt;&lt;p&gt;&amp;gt;&lt;i&gt;“What is most worrying is that the algorithms leave no trace of concerted action,” the researchers wrote. “They learn to collude purely by trial and error, with no prior knowledge of the environment in which they operate, without communicating with one another, and without being specifically designed or instructed to collude.” This risks driving up the price of goods and ultimately harming consumers.&lt;/i&gt;&lt;p&gt;I don&amp;#x27;t think it&amp;#x27;s out of the realm of possibility that two companies could arrive at such a move without &lt;i&gt;conscious&lt;/i&gt; collusion. I also don&amp;#x27;t think it should be treated differently.&lt;p&gt;Long term, I think Visa an MC could shoot themselves in the foot. Merchants are now allowed to charge fees for using CCs IIRC in at least some areas.&lt;p&gt;You could easily end up with a situation like Europe where people mostly use debit cards for in person purchases since the processing fees are lower.&lt;p&gt;Consumers lose the protection of a buffer from their bank account, issuers lose out on revenue. Not a good outcome IMHO.</text></comment>
<story><title>Visa, Mastercard mull increasing fees for processing transactions: WSJ</title><url>https://www.reuters.com/article/us-paymentprocessors-fees/visa-mastercard-mull-increasing-fees-for-processing-transactions-wsj-idUSKCN1Q41ME</url></story><parent_chain><item><author>tome</author><text>Is it a cosmic coincidence that these two large competitors are going to increase fees at exactly the same time?</text></item></parent_chain><comment><author>jasode</author><text>Several forces would contribute to both VISA and MC changing fees at the same time.&lt;p&gt;- the typical open and transparent &amp;quot;price signaling&amp;quot; where competitors can &amp;quot;see&amp;quot; others&amp;#x27; price changes.  Similar to one airline immediately changing (matching) a ticket price in response to another airline lowering or raising its price.  Same mechanism as Amazon bots constantly web scraping Best Buy and Walmart and Best Buy in turn scrapes Amazon.  Everybody is constantly monitoring everybody&amp;#x27;s prices.&lt;p&gt;- Visa and MC have overlap of owners[1][2].  4 out of the top 5 owners are the same for both:  Vanguard, Blackrock, FMR, State Street&lt;p&gt;- Visa and MC have overlap of member banks that also have minority ownership&lt;p&gt;Yes, you were being sarcastic about the coincidence but it seems like the natural economic equilibrium is for both to have near identical network fees.&lt;p&gt;[1] Visa top 5 institutional stockholders:  &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.nasdaq.com&amp;#x2F;symbol&amp;#x2F;v&amp;#x2F;ownership-summary&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.nasdaq.com&amp;#x2F;symbol&amp;#x2F;v&amp;#x2F;ownership-summary&lt;/a&gt;&lt;p&gt;[2] MC top 5 institutional stockholders:  &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.nasdaq.com&amp;#x2F;symbol&amp;#x2F;ma&amp;#x2F;ownership-summary&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.nasdaq.com&amp;#x2F;symbol&amp;#x2F;ma&amp;#x2F;ownership-summary&lt;/a&gt;</text></comment>