I can assure you they use part of the interchange fee to cover fraudulent transactions or they offload the risk via insurance covering fraudulent transactions.

I can assure you they use part of the interchange fee to cover fraudulent transactions or they offload the risk via insurance covering fraudulent transactions. There’s no way the issuing banks or Visa/MC just eat the fraud charges, we all pay for it. Yes, rewards cards are paid for with interchange fees, but that doesn’t mean that’s the only thing they pay for. Most people pay more interest than they earn in fees per year anyways shrug