> Do you think it costs Visa 66% more to process a payment in the US than Australia? The answer is, of course, it doesn't.
I know literally zero about credit cards beyond what I know as a user, but I can imagine a couple of reasons why that would be plausible, ranging from "There is more credit card fraud in the US" to "The market for credit card rewards in the US is more aggressive, and a 1.75% fee is a net loss for many US rewards cards". Can this really be dismissed out of hand like that?
Fraud rates in the US are very, very low. I don't know the stats top of my head for CNP (Card Not Present or Online Fraud) but in general the industry as a whole was running at around 8-12bp couple of years back. It is not something that will materially change interchange rates. International fraud rates tend to vary but not 0bp. Many European countries adopted Chip and Pin early on, which reduced fraud rates but not to the point that will explain a 60+% diff. See my other comment on lobbying in the US.
At this point, a large portion of the fee goes to fund rewards. Despite that, there's been an inexplicable shift in payment volume to debit cards which have little or no rewards.
Maybe attributed to debt conscious millennial generation? I believe this is why financial management services like Simple and Moven that offer only debit cards are becoming more popular.
I know literally zero about credit cards beyond what I know as a user, but I can imagine a couple of reasons why that would be plausible, ranging from "There is more credit card fraud in the US" to "The market for credit card rewards in the US is more aggressive, and a 1.75% fee is a net loss for many US rewards cards". Can this really be dismissed out of hand like that?