I didn't go into rewards programs because that's an entirely more complex issue. In fact, rewards programs are a business hack upon the risk model. At some po

I didn't go into rewards programs because that's an entirely more complex issue. In fact, rewards programs are a business hack upon the risk model. At some point, someone noticed that they were accepting all of this risk money per transaction, and that they could make a tidy profit if they took only the low risk users, so that they could make profit on the risk model. Well, how do you attract the low risk users? You offer them a cut of the transaction. Over time, as you pull more and more low risk users into the rewards pool [edit for clarity: there are only high risk users in the default pool], the cost of doing business as usual goes up, and you have to start raising your risk charges. Well, higher risk charges means more money available for rewards... and so on and so forth. Durbin should help to restore balance, but it will take some time.