>Visa's 2% fee may seem low but from a scale and competitive standpoint it is fairly absurd - they are making 80% gross margins on $30b of revenue to do what boils down to a few API calls and some fraud repayment.
The banks issuing Visa cards do fraud repayment. Visa gets paid for their network, and specifically their network of higher income spenders who want to play the rewards game. Also, note that Visa does not earn 2% of transaction totals. A signification portion of total card processing fees goes to the card issuing banks to pay for rewards and fraud repayment.
Exactly, the interchange fee is split between the issuing bank(largest cut), acquiring bank, and the network(smallest cut). Yet everybody acts like visa is just skimming 2% from every transaction without them getting anything in return while they have created entire lifestyles and communities around hacking credit card offers.
The banks issuing Visa cards do fraud repayment. Visa gets paid for their network, and specifically their network of higher income spenders who want to play the rewards game. Also, note that Visa does not earn 2% of transaction totals. A signification portion of total card processing fees goes to the card issuing banks to pay for rewards and fraud repayment.