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Square’s service, which makes anyone with a smartphone into someone… - Omnia mutantur, nihil interit.
March 4th, 2012
09:07 am
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Square’s service, which makes anyone with a smartphone into someone who can accept credit or debit cards, does not come free. You must pay it 2.75 percent of the transaction for the privilege of accepting plastic, though the person who swipes the card pays nothing.
http://www.nytimes.com/2012/02/25/your-money/why-its-so-hard-to-transfer-cash-to-your-friends-your-money.html?_r=1

Am I correct in thinking that most people would read this as "Square's fee is borne by the payee" and not as "Square makes the fee visible to the payee and hides it from the payer"? I see this kind of thing all over the place. It's not even conceptually coherent for a fee on a bilateral transaction to be imposed (by fiat) on one party or the other. What actually happens is that either the transaction no longer happens (because the fee is greater than the surplus value otherwise produced by the transaction) or the fee is split based on market conditions, not the intention of the entity imposing the fee. Yet I think people think Social Security and Medicare cost half as much as they do for the same reason (the arbitrary allocation of half of the payroll tax to "employer" and half to "employee").

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From:boredatheist
Date:March 5th, 2012 09:40 am (UTC)
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On the surface, you seem to be critiquing the clarity of the thing that you quote. This seems a bit odd to me, since I found the quote quite easy to comprehend, whereas your statements confuse me.

I think maybe you're upset that they don't include the phrase "our financial system is fucked up kludge" anywhere? I'm not really sure what's upsetting you.
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From:kenoubi
Date:March 5th, 2012 04:36 pm (UTC)
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I don't think the quote is unclear, I think it's misleading. It reinforces the (IMO incorrect and widely held) belief that the entity imposing a fee on a transaction gets to choose which party bears the cost of the fee. I didn't have trouble understanding the quote either, but I had been previously exposed to the argument.

Our financial system is fucked up, but that's not really relevant to this quote.
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