Visa and Mastercard agree to lower average credit card interchange fee below 1%

...in Canada

> That means on a $100 purchase, if a customer pays with a credit card, the retailer will get at least $99, where they previously would have kept as little as $97 in some cases.

I absolutely love the heavy lifting “as little as” is doing here.

> Businesses with annual Visa sales volume below $300,000 will qualify for the lower fee, as will those who do less than $175,000 from MasterCard.

That’s revenue, not profit. So your business basically needs to be casual or failing to get the lower rate.

Visa and Mastercard don't keep much of interchange at all and never have.

The vast majority is paid to issuing banks to pay for loan origination, fraud and, most significantly, to return in the form of cash back or points.

These networks charge 0.2% for debit and 0.3% for credit in Europe as per regulation, you just don't get rewards there.

Kinda sounds like they're just going to squeeze issuing banks. Cash back and points cards in Canada (already pretty weak offerings compared to the US) are going to get further watered down. I've no real opinion on this, tbh.

Some napkin math that may not be right: Visa processed 11.6T in payment volume last year. Net revenue was $29B. Opex was $9.3B. Net income was $16B. That means their net revenue is about 0.25% and their net income is like 0.137% of transaction volume. This passes the smell test given their EU-mandated numbers. [1]

[1] https://annualreport.visa.com/financials/default.aspx