That 2% is received more form the Consumers directly. Banks make 80% of income from Consumers in terms of late fees, interest charges, annual fees and various o

That 2% is received more form the Consumers directly. Banks make 80% of income from Consumers in terms of late fees, interest charges, annual fees and various other charges they slap on consumers. Part of this goes to pay for the rewards i.e. not all rewards are paid from Merchant acquisition fees.