Mastercard/Visa: new bill will do little to challenge duopoly
Every day, millions of Americans use their credit cards to buy things like a cup of coffee or a bagel. But behind these mundane transactions, a battle is brewing over billions of dollars of fees associated with moving and collecting these payments.
When a consumer swipes their plastic, 2-3 per cent of the charge goes to payment networks and card-issuing banks. These charges add up quick, as indicated by Mastercard’s third-quarter operating profits of $3.1bn, up 14 per cent on the same period of 2021.
Shoppers made nearly $5tn in purchases on credit cards last year, according to the Nilson Report on the payments industry. Merchants paid more than $105bn in so-called swipe, or interchange, fees on those transactions — a 25 per cent jump from 2020.
This story originally appeared on: Financial Times - Author:Tax Cognition
