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0:00 Chase’s new payment system
2:11 What it means for us
6:12 Fintechs and debit card rewards
9:10 Pay by Bank
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28 comments
💳 Sebby's Card Picks: https://www.asksebby.com/credit-cards
🎟 Yotta for I Bonds: https://www.asksebby.com/yotta 🍀 New users can use code "LUCKY" to get free tickets (one-time, not recurring) with any deposit.
💳 CC aren't going anywhere anytime soon. @DaveRamsey would love it though if they did.
This just sounds like what we have in Australia already, alternative network systems outside of visa and mastercard, with lower network fees for merchants. Comes in 2 forms, 1. eftpos (debit system created by a collective of banks in Aus) used as an alternative to visa and mc for instore/face to face. 2. BPay (another system created by Aus banks) to pay for utility bills, gov expense (car rego, taxes). Both systems have very low transactions fees for merchants, who normally don't pass on these cost to consumers, unlike surcharges I will find with visa or mastercard.
Aus has regulation caps on how much merchant can be charged for card transactions. Which means we never get these 2% – 5% cashback reward cards, but we also have a lot smaller surcharges or removed (less than 1% unlike before). Our banks rewards transfer rate are not 1:1, normally it is 2 or 3:1 to airline partners, points earn rate from 1 to 2 points, 3 points depends on the merchant and card but few and far in between. Which makes airline cards here equal or better in a lot of cases especially with Qantas or Virgin from 0.75 to 1. AMEX is still top dog.
Regardless, sign-up bonuses are plentiful, value like lounges passes, fight credit and insurances still exist. But nothing like the scale of 200 to 300 flight credit [its smaller] (unless AMEX) or food delivery credit etc. instead it is partnered cashbacks and discounts.
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where have you used points for snow boarding / skiing stays? looking for hotel recommendations this winter season for it
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If we know about it, it isn't a secret.
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💳, the government has a goal of becoming cashless, from your comments it appears Chase is trying to stay in front of that move. As for passage of the bill, with Democrats in charge anything can happen and it’s guaranteed that Joe Biden will do anything he can to destroy the middle class.
The UK cards you mentioned don't make good examples: they are both VISA and MasterCard each, and what Chase is trying to achieve is to get rid of VISA and MasterCard altogether.
In addition, the interchange fee is capped at 0.3% flat in EU/UK by law.
I think Chase as one of the major US issuers is taking the Korean credit card industry as a model. Below is how it looks like:
– There are 8 major local issuers with their own networks (no Visa, MasterCard, Amex, or Discover)
– International brands such as Visa, MasterCard, Amex, Discover, and even Dinersclub, plus 10 minor local brands use one(or more) of those 8 networks on contract.
– The interchange fee is capped at 0.8% – 1.6% depending on the business' annual revenue since 2016
– If a business opts to accept credit cards, they HAVE TO accept all networks. (Costco is paying a heavy fine every year for violating this regulation)
– The businesses MAY NOT impose any surcharge on credit card purchases.
The card issuers were really upset when the credit card act passed in 2016 that capped the interchange fee, and many perks disappeared/got limited for consumers.
However, the experience has been overall positive since then: even the tiniest shops accept credit cards(even Amex), consumers don't have to walk on eggshells when swiping their cards, tax evasion became almost impossible, etc.
And Korean credit cards aren't that bad after all when it comes to cashback: I recently got a new credit card that gives me a flat 5.5% cashback on mobile wallet purchases up to $150 per month(0.5% after that), and my mother who has been using my other AU card will be applying for this one for herself next month – to double the 5.5% monthly limit combined to $300.
Admittedly, the travel perks are no match for US credit cards, but this is more related to the size difference of economy IMO.
Chase is right, the network providers such as Visa has been making too much money for virtually nothing for too long.
Q: Can a "trifecta" be done across primary and authorized users? i.e. wife is primary and I'm authorized on Chase Sapphire Preferred. To do the trifecta does she need to be primary for the other two chase cards we plan to get? Or can I be the primary and she the authorized user? P.S. Trying to decide between Chase and Citi tri/quad-fectas 🙂 ) Thanks in advance! (Currently have CSP and Citi Premier).
Doesn't everyone's extreme debt and high apr keep rewards alive? I thought that alone is enough. Im not even sure why the credit card fee charges to businesses is necessary to keep rewards alive
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If people with disposable income are disincentivized to spend, that’s bad for everyone. So let’s hope we don’t go the way of the UK
What do you think about crypto currency? 💳💵
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I think pay by bank is more to replace debit cards and compete with the plastics and P2P apps. Higher credit scorers tend to make more money for them long-term and poorer people will always need to borrow money, making credit cards still relevant. Plus, not only does this cut out the middleman, it also reduces physical card costs. Think of how much money and plastic is wasted in people losing their cards every weekend.
Chase is trying to innovate on payment systems to what I've read, it already exists, it is called Zelle. American Express is smiling wide if Chase is willing to kill billions of dollars of revenue from credit cards.
Is everyone forgetting about Chase Pay and how great that went? Even though it ran on Visa/MC infrastructure, it was pretty much DOA. I don't think Chase will make a big splash with this.
💳 thank you Sebby. You provide a very valuable service.
Jerks..I just got my credit right…i hate these jerks in the white house. smh always for the big company 😒 🤦
the pay by bank is already being done in countries like Colombia where you can send money directly to anyone bank to bank without fees.
I hope it doesn’t go away; it’s been such a cash cow for my wife and I. After five years of following you we’ve heavily subsidized big annual trips abroad and just booked two week trip in Africa, safaris, flights, hotels, excursions 95% with points.
For two middle class people it’s less us do things most people never will.
Thanks for all the tips and the channel.
Think big, set goals, work hard and succeed. I realize in life there’s no shortcut to getting rich, but investing remains the best way to go about it.
I think Chase is worried about the US Government developing there new FedNow payment system. Where payments are instant, secure, back by the Federal Government. No more waiting 3 to 5 days for your money. It is instant. Merchants will hop all over this. Instant payments. There will be no more ACH waiting times. It will be a big success. Business will drop credit card instantly if this happens. The problem is the Government will know all transaction what is purchased. That's what they want. It will be free to use for the merchants and customers but the Government knowing everything is scary and they can shut you down instantly if they want too. But that's where we are heading. Their next step is to do away with cash.
If I'm understanding this correctly…Chase wants to eliminate rewards perks for credit cards making it easier for merchants to accept cards in exchange for lower merchant fees. So Chase looks like a Robin Hood saving the day and showing mercy to the businesses being choked by merchant fees to credit card companies. But the dark side to this is this will eliminate choices for consumers to choose their credit cards by banks because only the big ones will thrive in that new landscape. Say goodbye to Discover, Citibank, BoA, HSBC and all other niche credit card companies. They can’t survive without these reward perks programs in place because they don’t have the infrastructure to start their own banking branches to handle transactions like this. Mastercard and Visa could go out of business but Chase would simply be clearing the playing field for them to aim at their biggest competitor…American Express. Amex is well positioned for this because they have their own banking system run by their own networks. But I have a Chase Preferred card…what happens to this….does this become a version of the Amex Gold card with no credit limit but having a hefty annual fee?