Will Transaction Fees in Retail Payments Go Extinct?

 

The majority of the world’s 2.8 billion credit cards are issued by just four powerhouses, and within that, it’s really a fight among the top two: Visa and Mastercard. According to ShiftProcessing.com, over half the credit card market share belongs to Visa alone, considering it has 335 million cards in circulation.

It’s no surprise then that consumers and financial professionals alike were caught by surprise in November, when Amazon announced it is no longer accepting Visa cards in the UK, supposedly as the result of a rising “interchange” fee in a post-Brexit Europe. Merchants forked over $110 billion in credit card processing fees in 2020, and not only are these normalized fees a cost burden for ecommerce marketplaces and small businesses that rely on easy and low-cost online sales, but their utility and acceptance are being questioned with the rise of fintech innovations, alternative payment methods, and more.

If Amazon’s distancing from Visa sticks, and with options like “buy now, pay later,” direct-to-bank transfers, and even artificial capital like crypto for payment, will the mega credit card companies’ duopoly be disrupted by alternative payment methods? David Shipper, a Strategic Advisor in Aite-Novarica’s Retail Banking & Payments group, says it’s likely the payment ecosystem expands, but the credit card giants shouldn’t be too worried.

Hamed Abbasi, Co-Founder & CEO of accounts payable and receivable software company Plooto, agrees; credit cards aren’t going away, or really even phasing out. But different markets show different adoption rates, and could lead to alternative payments finding their stride outside of the U.S.

More Stories Like This:

How Will Sustainability Go Together with the “On-Demand” Economy?

Toy Supply Chain Keeps Retailers Out in the Cold This Christmas

Follow us on social media for the latest updates in B2B!

Image

Latest

Next generation of security solutions
The Future of Security: Discovering the Next Generation of Security Solutions at ISC West
April 23, 2024

The recently concluded International Security Conference & Exposition West 2024 (ISC West) proved to be an indispensable platform for discovering the next generation of security solutions, providing attendees with invaluable insights into the future of the industry. At a recent episode of MarketScale’s roundtable show Experts Talk, Cathal Walsh, Vice President and Chief Security […]

Read More
Cyber Resilience: To Protect Corporate Assets, Businesses Must Invest in Cybersecurity Training
April 23, 2024

As cyberattacks occur at increasing frequency, cybersecurity has become a cornerstone of corporate security strategies across all sectors. With businesses increasingly reliant on digital infrastructures, the quality of a company’s cybersecurity training is no longer just an operational requirement — it is a strategic asset. The stakes are high, as a breach can lead […]

Read More
Forming Relationships with Industry Insiders Can Quell Sales Cycles and their Length of Time
April 23, 2024

New companies are facing more and more challenges in the security industry as sales cycles are experiencing lengthier times. One of those reasons is due to the complexity of the security industry itself, along with the unique and special business models every new company will come in with. But there is a solution to […]

Read More
Cyber-first approach
From Bollards to Bytes: Why Security Firms Need to Adopt a Cyber-First Approach
April 23, 2024

How can the security industry effectively navigate the shift from traditional physical security measures to adopting a cyber-first approach in its sales and integration strategies? The transition from physical to digital security solutions was a major theme at the International Security Conference & Exposition West 2024 held earlier this month. On a recent episode of […]

Read More