MasterCard and Visa have the ability to put the full cost of fraud (including a fee for dealing with it) onto merchants in many/most cases. This includes "frien

MasterCard and Visa have the ability to put the full cost of fraud (including a fee for dealing with it) onto merchants in many/most cases. This includes "friendly fraud" of the false chargeback variety (customer falsely claims they did not receive a product) taking advantage of consumer protection guarantees offered by MasterCard and Visa to their customers as a value add. IE, CC companies offer their customers consumer protection to encourage use of their product. They charge merchants when a consumer uses the product. Then, they unload the risks, costs and other burdens inherent in offering this add on service onto merchants as well. This is why they put little effort into investigating claims, making it feasible for merchants to dispute them or otherwise preventing fraudulent claims. It's has a distinct odor of oligopoly. Oligopoly also allows for price setting. IE, the forces pushing the cost of a good or service closer to the (marginal) cost of producing it are weak. It could also be that "card present" is cheaper because in-store purchases have to compete with cash purchases. IE, they might be charging the higher fees because they can, not because they have to.