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> And the benefits accrue largely to the cardholders of premium cards, which are wealthy people. To have competition you do need a way to differentiate, and it
by Ntrails 2y ago
> And the benefits accrue largely to the cardholders of premium cards, which are wealthy people.
To have competition you do need a way to differentiate, and it's going to be funded by some combination of those fees, interest/charges, kickbacks etc. Some interchange fee is simply necessary, iirc the EU attempts to prevent the egregious regressive aspects of that by capping the interchange fees of all cards. Thereby eliminating the "Amex Premia" as it were.
I reckon it's a pretty sensible step?
- jncfhnb 2y agoYou do not need differentiation for competition. It’s called perfect competition and it’s a race to the bottom for price, which is the ideal outcome here.
- lxgr 2y agoExactly. Remember when mobile carriers were competing via "differentiation"? Practically, that meant waiting on firmware updates for months or years, having to deal with preloaded and non-removable crapware on mobile OSes etc. Now they're largely "dumb pipes" competing on price and quality of service, and as a consumer I couldn't be happier. (Of course, there are now different gatekeepers on our phones, but that's a different discussion.)