Interchange fees on personal credit cards have been capped to 0.3% in the EU (in a law from 2015). As a result, there are no 1-2% cash back options for cards to keep track of or any other silliness, you can just use your credit card as a method of payment, without thinking about which card to use for what.

I'd personally welcome similar regulation caps on app stores (higher than 0.3%, but also certainly lower than 30%) in the EU.

> As a result, there are no 1-2% cash back options for cards to keep track of or any other silliness, you can just use your credit card as a method of payment, without thinking about which card to use for what.

In other words, consumers get offered fewer options, which results in a far worse deal, overall, but in exchange they can avoid the hassle of evaluating all the better options they'd have if they hadn't been legislated away.

I'm not too familiar with day-to-day payments in the US (I'm in Germany), so please enlighten me if I have something wrong here. Is there an actual option I have as a consumer to avoid the fee when buying something?

My understanding: everybody pays the same price, independently of payment method. If the standard credit card interchange fee is 2%, then the vendor has to raise their prices by around 2% to make the same amount of money on the product. As a consumer, I would have to pay the 2% of the inflated price if I pay by cash (or debit card or something).

So I'm forced to pay by credit card with a cash back option or some other rewards to make back part of the 2% that were added on top of the original price.

I lose, if I don't play the game, and I'm back around a zero-sum-game if I do play along. In any case, the credit card company wins.

If the fees are capped, the vendor doesn't have to raise the price, and the consumer wins no matter the payment method.

I only have a couple potential counterpoints:

1) The 2% fee might mostly be captured by the credit company and thus represent a net benefit to most consumers (at the expense of retailers) because retailers tend to want prices like 1.99 and would be reluctant to raise that to 2.01 because of the reduced sales. Over time there might be other options like slightly reduced portion sizes to help the store, but profiting a little bit extra on most products is hard, and profiting a lot extra on a few products is near impossible because consumers will buy from competitors.

2) The 2% fee isn't reimbursed equally to all consumers, so individuals with higher credit scores might have a preference for the current system even if it's a zero-sum game overall. (this point also easily allows arguments the other way in favor of regulating fees because we probably shouldn't be extracting an additional percent here and there from young people and those with financial hardships)

>The 2% fee might mostly be captured by the credit company and thus represent a net benefit to most consumers (at the expense of retailers) because retailers tend to want prices like 1.99

How does it benefit the consumer if the credit company takes 2%? I cannot see why it would make a difference to the consumer (at least in the short term) whether the retailer or the credit company takes the 2%.

That’s a valid pushback on my assertion that the U.S. market benefits consumers. It’s still true that you can do better than 2% if you’re diligent, but most people aren’t, so point taken that it may be a wash for even moderately tuned-in consumers. Thanks!

Credit cards are near the bottom of the value stack. Uber, Apple, et al are built on top of that and need to pay the credit card transaction fees, which means they need to charge X% more than 2-3% to keep any money for themselves.

You could argue that their chosen X% is too high relative to their value add, but any competitor will definitely need to charge more than your proposed X=0.

A competitor could charge x=0 if they can get sponsored apps to pay up so that they appear at the top of the listings.

Electronic credit card processing was born in the 70s, a few years after the ARPA research project was started and decades before the modern internet was born. At first it took a five minute phone call to authorize charges, so the infrastructure to support credit cards before commoditized networked computers was substantial. The credit card processing fees have gone down substantially since then with improvements in technology.

I'm not saying 30% is justified, but there's a significant difference between the service provided by storefronts vs credit card companies. You're comparing Apple to oranges.

Having my app on a large store front such as Steam or Play Store can and often does bring a lot of organic views. I don't know any business getting organic views from credit companies, except the sponsored once, which I'm sure are probably paying a good chunk for that. App stores also handle feature development, hosting, and many other services. What do credit card companies give to business?

Now the question is, how much is the storefront traffic worth to you in terms of cut. If you get 30% or more sales being on Steam vs selling on your own website, then isn't it technically worth it being on that store front?