Visa and Mastercard don't keep much of interchange at all and never have.
The vast majority is paid to issuing banks to pay for loan origination, fraud and, most significantly, to return in the form of cash back or points.
These networks charge 0.2% for debit and 0.3% for credit in Europe as per regulation, you just don't get rewards there.
Kinda sounds like they're just going to squeeze issuing banks. Cash back and points cards in Canada (already pretty weak offerings compared to the US) are going to get further watered down. I've no real opinion on this, tbh.
Some napkin math that may not be right: Visa processed 11.6T in payment volume last year. Net revenue was $29B. Opex was $9.3B. Net income was $16B. That means their net revenue is about 0.25% and their net income is like 0.137% of transaction volume. This passes the smell test given their EU-mandated numbers. [1]
The vast majority is paid to issuing banks to pay for loan origination, fraud and, most significantly, to return in the form of cash back or points.
These networks charge 0.2% for debit and 0.3% for credit in Europe as per regulation, you just don't get rewards there.
Kinda sounds like they're just going to squeeze issuing banks. Cash back and points cards in Canada (already pretty weak offerings compared to the US) are going to get further watered down. I've no real opinion on this, tbh.
Some napkin math that may not be right: Visa processed 11.6T in payment volume last year. Net revenue was $29B. Opex was $9.3B. Net income was $16B. That means their net revenue is about 0.25% and their net income is like 0.137% of transaction volume. This passes the smell test given their EU-mandated numbers. [1]
[1] https://annualreport.visa.com/financials/default.aspx