alt Hacker NewsThey also capped credit card fees at 0.3% in 2015. It also included a prohibition on discrimination against any merchant based on eg size or category of goods sold. And as far as I can see neither Mastercard nor Visa had problems staying in business.
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So you cannot compare it apples to oranges. There is much more regulation in EU.
In EU there is also more consumer protection by default, so charge backs can be rejected by merchants but a consumer can easily take a merchant to court. So capping card fees is also more reasonable.
Also, when a merchant goes bankrupt and customers perform charge-backs it would involve the entire payment chain. First merchant reserves, then acquiring bank, then MasterCard/Visa, then issuing bank (customer), and lastly the customer. With lower card fees, this has impact on the merchant reserves and their risk profile. Furthermore, acquirers can add additional fees on top if needed.
You can also get lower card fees in US if you have a low risk business model.
Yes! I forgot about this. The EU Interchange Fee Regulation (IFR) effectively eliminated the high fixed minimum fees that previously made small-value card transactions unprofitable for merchants.
The net effect of this is that in Poland, for example, you can carry your phone and no wallet, because you can pay literally for everything using your phone. And I do mean everything, I've recently been to a club in Warsaw and the cloakroom had a terminal mounted on the wall, people just tapped their phones.