Nice piece, made me think. I’m curious about your ‘inevitable’ premise. I read a book about Visa some time ago, a platform that doesn’t seem to optimize for profit at the expense of the producer. I recall trust in payment was a key feature, a feature many of us early adopters value. It too grew to be a global system. Any thoughts on that?
Nice piece, made me think. I’m curious about your ‘inevitable’ premise. I read a book about Visa some time ago, a platform that doesn’t seem to optimize for profit at the expense of the producer. I recall trust in payment was a key feature, a feature many of us early adopters value. It too grew to be a global system. Any thoughts on that?
Thanks for the thoughtful question. Visa's (BankAmericard) case is interesting, but I don’t think it contradicts the “inevitable” premise—if anything, it reinforces it.
Visa may have started differently, but it maximized profit, consolidated power, and engaged in anti-competitive practices like all of the other examples I cited. BankAmericard (later Visa) went from a cooperative structure to one of the biggest IPOs in history, faced major antitrust lawsuits, and lobbied to protect its market dominance at the expense of competition. That is, in part, how they became the biggest payment platform in the world, beating out American Express (who for most of this time was the worldwide leader.)
The “trust in payments” wasn’t a feature that kept it from profit-seeking—it was a business strategy that helped Visa become indispensable before shifting its focus to extracting revenue. That’s precisely the cycle I described in this piece—just in a different industry. Today, they continue to engage in the same anti-competitive practices as Facebook, Amazon, or Google (or quite frankly, that arrow is the other way around - Facebook, Amazon, and Google, engage in the same practices as Visa, since Visa engaged in these practices way before tech companies did.) As someone who operates a business that accepts credit cards (even here on substack) Visa isn't altruistic in any way (although AMEX is considerably worse to deal with as a merchant, which is why many merchants refuse to take AMEX.)
Nice piece, made me think. I’m curious about your ‘inevitable’ premise. I read a book about Visa some time ago, a platform that doesn’t seem to optimize for profit at the expense of the producer. I recall trust in payment was a key feature, a feature many of us early adopters value. It too grew to be a global system. Any thoughts on that?
Thanks for the thoughtful question. Visa's (BankAmericard) case is interesting, but I don’t think it contradicts the “inevitable” premise—if anything, it reinforces it.
Visa may have started differently, but it maximized profit, consolidated power, and engaged in anti-competitive practices like all of the other examples I cited. BankAmericard (later Visa) went from a cooperative structure to one of the biggest IPOs in history, faced major antitrust lawsuits, and lobbied to protect its market dominance at the expense of competition. That is, in part, how they became the biggest payment platform in the world, beating out American Express (who for most of this time was the worldwide leader.)
The “trust in payments” wasn’t a feature that kept it from profit-seeking—it was a business strategy that helped Visa become indispensable before shifting its focus to extracting revenue. That’s precisely the cycle I described in this piece—just in a different industry. Today, they continue to engage in the same anti-competitive practices as Facebook, Amazon, or Google (or quite frankly, that arrow is the other way around - Facebook, Amazon, and Google, engage in the same practices as Visa, since Visa engaged in these practices way before tech companies did.) As someone who operates a business that accepts credit cards (even here on substack) Visa isn't altruistic in any way (although AMEX is considerably worse to deal with as a merchant, which is why many merchants refuse to take AMEX.)
Extremely interesting article. Thanks.