3 ms·

> "A much smaller portion of interchange goes to the credit card processor, to the acquiring bank, and to the credit card network" That's technically not accur

> "A much smaller portion of interchange goes to the credit card processor, to the acquiring bank, and to the credit card network" That's technically not accurate. Credit card networks do not earn money from interchange [1]. [1] "Visa does not make money from individual transactions." https://revenuesandprofits.com/how-visa-makes-money-understanding-visa-business-model/ https://revenuesandprofits.com/how-visa-makes-money-understa...

patio11 5y ago
I would like to reiterate my standard disclaimer for this publication but if you want to bet that I don't understand how scheme fees are calculated that is a poor decision.
- fragmede 5y ago
  That raises a question though: In your opinion, where/in what subjects would betting against you not be a poor decision?
  - patio11 5y ago
    I'm less good at poker than many people's model of me predicts. (Probably juuuuuust about good enough to do 2/5 profitably in Vegas, though I mostly play tournaments because they're more fun for me.)
- alberth 5y ago
  I’m not suggesting you don’t understand it, but see my sister comment in this thread. How it’s worded implies issuers are even paying a fee & that fee is derived from interchange. When that’s not always the case.
the_pwner224 5y ago
> Visa does not make money from individual transactions. Instead, it earns revenues from the issuers and acquirers based upon the overall payment volumes and number of transactions processed. Which is effectively the same thing.
- alberth 5y ago
  But it’s not. You’re assuming the card networks are even charging issuers, and issuers are funding these fees from the revenue they collect in interchange. They are not. It’s not uncommon for the card networks to not even charge issuers at all. The card networks need to win over the issuers to even issue cards for their network. It’s much easier to win an issuers business by not charging them any fees at all.

patio11 5y ago

I would like to reiterate my standard disclaimer for this publication but if you want to bet that I don't understand how scheme fees are calculated that is a poor decision.

fragmede 5y ago
That raises a question though: In your opinion, where/in what subjects would betting against you not be a poor decision?
- patio11 5y ago
  I'm less good at poker than many people's model of me predicts. (Probably juuuuuust about good enough to do 2/5 profitably in Vegas, though I mostly play tournaments because they're more fun for me.)
alberth 5y ago
I’m not suggesting you don’t understand it, but see my sister comment in this thread. How it’s worded implies issuers are even paying a fee & that fee is derived from interchange. When that’s not always the case.

the_pwner224 5y ago

> Visa does not make money from individual transactions. Instead, it earns revenues from the issuers and acquirers based upon the overall payment volumes and number of transactions processed. Which is effectively the same thing.

alberth 5y ago
But it’s not. You’re assuming the card networks are even charging issuers, and issuers are funding these fees from the revenue they collect in interchange. They are not. It’s not uncommon for the card networks to not even charge issuers at all. The card networks need to win over the issuers to even issue cards for their network. It’s much easier to win an issuers business by not charging them any fees at all.