Seems misleading or at the very least incomplete not to mention that basically only the US has these high credit card interchange fees of 2-3%.

EU & UK cap it at 0.3% (0.2% for debit cards), and the rest of the world are closer to EU than US fees, if I understand correctly.

The power of the free market.

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voldacar 6 days ago | parent | next [-]

Seems misleading or at the very least incomplete to blame these fees on "the power of the free market" when the visa / mastercard duopoly exists due to regulations making the entry barrier to creating a new card network essentially infinite

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abirch 6 days ago | parent | next [-]

Anyone is free to use discover and it works for most merchants in the USA.

American Express leverages the fact that most consumers don’t care what the merchant is charged

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IshKebab 6 days ago | parent | prev | next [-]

I don't think it's due to regulations. It's just a natural monopoly due to network effects. Any new entrant has to convince hundreds of payment processors and retailers to accept their cards before anyone even has them. Regulations are a trivial barrier compared to that.

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TehCorwiz 6 days ago | parent | prev [-]

I think that was parent’s point. That the US does not have as free a market.

	▲	randallsquared 6 days ago \| parent [-]
		> EU & UK cap it suggests that was not the GP's point.

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codedokode 6 days ago | parent | prev | next [-]

The problem is not that credit card companies charge large fees. The problem is that they do not allow to pass the fee on the customers. Because of this I don't like European regulation - instead of capping the fees they should just make clauses that not allow merchants to set a card acceptance fees, illegal.

The clause that doesn't allow passing fees on the customer is the only thing that makes market non-free.

I think it would be only fair if people paying with a card were charged more. They get the cash back from the bank anyway.

Also I know that there are super-discounted stores in my country that do not accept cards for this reason.

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dsr_ 6 days ago | parent [-]

They absolutely allow you to pass the fee on to the customers... as long as you phrase it as a cash discount from the posted price, instead of a credit card fee on top of the posted price.

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BenjiWiebe 6 days ago | parent [-]

In the US it is legal to have card acceptance fees (in most states anyways).

This changed a while back.

	▲	HanClinto 6 days ago \| parent [-]
		I'm super super glad this change was made. It genuinely makes me smile every time I go to a merchant and they raise the price when I pull out my credit card -- it's not always convenient for me to carry cash, but this has helped me trend in this direction.

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FuriouslyAdrift 6 days ago | parent | prev | next [-]

Rewards drive up transaction fees. https://insight.kellogg.northwestern.edu/article/who-pays-ge...

"merchants are fee-insensitive, while consumers are rewards-sensitive. In other words, consumers pick credit cards (and, indirectly, networks) based on the goodies they receive, and stores will grudgingly tolerate high fees in order to accept credit cards."

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irusensei 6 days ago | parent | prev | next [-]

If it were really a free market we would have more alternatives.

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dzikimarian 6 days ago | parent | prev [-]

Yes - entire cost of processing trx including all intermediaries in EU is around 1%. Less if you are huge. Unlikely they were able to beat it.