Comment by nvme0n1p1
4 hours ago
Nobody is denying it costs money, the problem is it's not proportional to the value they add, nor their costs.
In the EU, their rake is capped by law, to an order of magnitude less than what they charge in the US. And it's still profitable. (Otherwise they would have pulled out of the market if they were losing money, obviously.)
The fraud prevention/etc you discuss benefits from economies of scale, but their fixed x% per transaction does not reflect those economies of scale. The free market has broken down here because of the difficulty for new market entrants.
> Nobody is denying it costs money, the problem is it's not proportional to the value they add, nor their costs.
The value they add is much greater than their costs. People who deny this lack a lot of imagination to ponder how inconvenient things could be without credit and debit cards.
But we don't need to imagine: If Visa and Mastercard didn't add more value than they cost, then merchants wouldn't accept them. It is still 100% voluntary for a merchant to decide if they want to accept cards or not. Which is a freedom they should have. These cards aren't legal tender.