In some cases a monopoly is needed or wanted, like in credit card cases you don't want a million credit card types that all work in different subsections. In such cases regulations are to prevent such companies from having too much influence and bottlenecking everything else with high prices or forcing their own other products. EU already did this with credit cards.
Or you force and open standard and now you have different companies using the same system but with competing pricing.
If something "has to be a monopoly", there is a good case to be made that you are talking about a core public infrastructure piece which shouldn't be under control of a singular private entity.
Credit cards need to have personal connections with businesses since it is about mutual trust. A business doesn't want to deal with a shady credit card and credit card providers doesn't want to deal with shady businesses.
So you are talking about a technical solution to a social issue, that wont solve it.
Online pay providers show that it is very well possible. There are tons of payment providers which are widely supported. The only difference is that some of them have a physical presence while others do not.
With a common standard, the available of card-based payment providers would indeed increase. In europe, you often can't pay with Diner's Club or American Express. If they would not all have proprietary systems and were compatible, then their adoption would in-fact increase.
Naturally, not every grandmother and their dog should be able to use this standard but there must be a well-respected authority behind it. Taken to the extreme and we couldn't trust anybody we couldn't have root certificates.
Mutual trust doesn't scale. You really think that either Visa or Mastercard has a personal connection to every grocery store that accepts credit card payments?
If you're from the USA maybe you're used to effectively a single payment system (or a small number that all use the same card reader)
Many countries have far more payment systems. For example, Japan, 7/11 takes Line Pay, PayPay, Merupay, au Pay, R Pay, d払い, Smart Code, J-Coin, Bank Pay, QOU-Pay, WeChat Pay, Alipay, Nanco, R Edy, iD, QUICPay, 9 different train cards, Mastercard, Visa, American Express, JBC.
Some of them you insert the card, some use NFC, some you scan a QR Code, some you show a QR code.
Some have had big discounts or "points", probably to try to get market share. The discounts can go either way. Some are for the consumer (get 5% cash back for example). Others are for the merchant (zero fees for N months, etc...)
That’s arguably not a great example, since there are both more than one international credit/debit card networks, and even these have been subject to constant regulatory scrutiny.
There was a time when common wisdom was that telephone companies and many other infrastructure businesses needed to “obviously” be monopolies as well (sometimes state-owned, sometimes private, which is arguably the worst of both worlds). I really wouldn’t want to go back to that.
> That’s arguably not a great example, since there are both more than one international credit/debit card networks, and even these have been subject to constant regulatory scrutiny.
The two cards are essentially interchangeable so it is a duopoly. And the fact that they are subject to constant regulatory scrutiny without adding laws to force new entrants is why it is such a good example, it shows how well regulations can work without adding competition. To me in Europe credit cards works really great with low fees and no fuzz, I don't think that anything needs to be done about that more than is already done.
To card issuing banks, absolutely not. Visa and Mastercard compete for their business.
To merchants, yes, since they can't reasonably only accept one but not the other, as that would turn away a large fraction of their customer base. This is why most regulatory action happens here.
> subject to constant regulatory scrutiny without adding laws to force new entrants
There are absolutely measures taken to encourage new market entrants or at least more competition among the existing ones. (Whether they are effective is a different question.)
As one example, in the US, every debit card issuer is obliged to add at least one other brand/network to their cards, so that merchants do in fact have some routing choice. In Europe, some countries also have a domestic competing debit scheme, such as CB in France, Girocard in Germany etc.
> I don't think that anything needs to be done about that more than is already done.
I think you underestimate how unstable the current equilibrium is. The interchange cap regulation is relatively new, and I doubt that the networks will fail to come up with other ways to grow their market share and/or revenue that will, at some point, require further regulatory scrutiny.
Not sure I understand, what has the EU done to encourage a credit card monopoly? That there's basically a world wide Visa/MC duopoly isn't something the EU has actively encouraged as far as I know, only regulated as you mentioned.
For banking transfers there's SEPA so assuming a similar system could be set up for credit cards.
In that case it should be owned/regulated by the govts. In India's UPI has multiple banks talk to multiple consumer and vendor apps in one ecosystem standardized by govt agency. and it is damn good compared to other systems.
