alt Hacker NewsDo Visa/Mastercard make much money in Europe? Most people use debit cards. I’m admittedly not clear on how exchange fees work for those.
Replies
AndroTux • today at 2:09 PM
They make buttloads. Debit cards still require a cut for VISA/MasterCard.
Do Visa/Mastercard make much money in Europe? Most people use debit cards. I’m admittedly not clear on how exchange fees work for those.
They make buttloads. Debit cards still require a cut for VISA/MasterCard.
Debit cards have scheme fees and interchange rates just like credit cards. Interchange rates for credit and debit cards in the EU are actually very comparable and both very low, which is very different from many other parts of the world (e.g. in the US, debit interchange is effectively a flat fee per transaction).
Visa and Mastercard make money on scheme fees paid to them by both issuers and acquirers (i.e. indirectly merchants), not interchange.
There's an indirect impact of lower interchange rates, as issuers will usually not be willing to pay more than 100% of what they're earning in interchange in scheme fees. Acquirers have no such implicit limit, though.