alt Hacker News> I'm not confident in my country's ability to create its own payment processing platform
You live in Canada, which already has better options than the U.S., though the sittuation is getting better in the U.S.
For example, Interac is free for most people and very easy to use.
Debit payments often cost merchants less than 10 cents per tap. The local gelato place only takes debit or cash; if you don't have either, they're happy to accept an Interac payment, and do so more often than you'd think.
Part of the problem is that the incentives are misaligned. People want their points systems. Merchants want customers, but they also want lower transaction fees. Most customers have debit cards that would be much cheaper for merchants, but choose to use their credit cards, because they want the "rewards."
While the 3% or so that a bank charges might seem low, if you look at this from a low-margin business, that 3% may actually be much higher percentage of their net profit.
Regulation concerning rewards systems could go a long way towards shifting the system to be much less costly for businesses.
There's not much hope of real change here; Canadian banks are very profitable, and are a cornerstone of our economy. It's very unlikely that politicians will do anything to risk that.
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> Most customers have debit cards that would be much cheaper for merchants, but choose to use their credit cards, because they want the "rewards."
I bet most people paying by credit are really using debit cards, but pick "credit" at the register because they don't want to enter a pin. Partly for security, but mostly because credit is faster/easier.
Unless you're 100% profitable, its always a higher effective %. If you're running somewhere closer to 10% (remember that it needs to be after all costs/paychecks/etc), that's nearly a third of your profit.
Anything optional that skims off the top cuts into profits extremely quickly.
There are other problems with debit vs credit cards as well (depending on country a bit). If someone fraudulently uses your credit card can generally just report it and you aren't on hook for it nor out of money while it's being investigated. If someone fraudulently uses your debit card you are usually out of the money until matter is resolved. And you won't necessarily get the money back via bank, you might need get it from merchant. In CC case merchant would need to sue to get the money if they still believe you actually made the transaction.