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Comment by paultopia

2 years ago

It seems pretty clearly implied from his Starbucks example: these rates are negotiated (at least with big merchants).

Presumably, for example, Starbucks is willing to pay higher interchange on the Chase sapphire series than on the Chase freedom series because they believe that the people carrying Chase sapphire cards spend more money. Starbucks would not be willing to pay that for less profitable customers.