yeah if the durbin exemption disappears, so do a lot of fintechs. It's a crazy big risk given a) there are people pushing to make it disappear and b) it's a total bs exemption in practice.
Things are quite different in Europe, where EU interchange is capped at a much lower 0.3% for credit cards and 0.2% for debit cards for most transactions [0]. Despite this, banking fintechs are still thriving, such as Monzo*, N26, and Revolut.
* whilst Monzo is a UK bank, Visa/Mastercard still use the same EU domestic interchange rates in the UK post-Brexit, at least for now.
It's been years since I had any connection to the conventional financial sector but I remain shocked by how many participants are involved in the flow of money, most of them fleeting and tangental yet each getting paid for the privilege.
I remember looking at the flow of cash from putting $100 into a 401(k) (US employer retirement plan) to the money actually getting invested. That drawing took up two whiteboards and as a result a few percent never made it into the market.
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[ 3.5 ms ] story [ 19.3 ms ] thread* whilst Monzo is a UK bank, Visa/Mastercard still use the same EU domestic interchange rates in the UK post-Brexit, at least for now.
[0] https://en.wikipedia.org/wiki/Interchange_fee#European_Union
I remember looking at the flow of cash from putting $100 into a 401(k) (US employer retirement plan) to the money actually getting invested. That drawing took up two whiteboards and as a result a few percent never made it into the market.