I've seen cards with 1% chargeback in the EU though. How does that work?
And it wasn't just a temporary marketing promotion. I've used such a card for many years.
(It was issues by a big bank that had almost no presence in my country... so maybe they were eating the cost just to build up a bigger presence and potentially enter the country?)
Yes that intuition is correct, though the reality is much more complicated. The actual share to the bank is roughly proportional to the risk of the transaction/ tied to the type of credit card
In the US. Not in Europe because interchange fees for consumer cards are capped at 0.3%
I've seen cards with 1% chargeback in the EU though. How does that work?
And it wasn't just a temporary marketing promotion. I've used such a card for many years.
(It was issues by a big bank that had almost no presence in my country... so maybe they were eating the cost just to build up a bigger presence and potentially enter the country?)
Yes that intuition is correct, though the reality is much more complicated. The actual share to the bank is roughly proportional to the risk of the transaction/ tied to the type of credit card
https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-in...
US Bank for a brief period opened up a 4% card, but then closed it so quick that obviously the numbers didn't work out there.
2% seems to be a local maximum of cashback cards. There's a lot of 2% cards, and only a handful above that.
Makes sense?
2% is just an example figure, the actual rate varies