Credit card companies like Visa and Mastercard make a killing each year. Visa made $18.3 billion last year, and Mastercard $12.5 billion. But a lot of those "earnings" are ill-gotten through corrupt practices like price-fixing and excessive fees. A lawsuit instigated by merchants has run it's course on these credit card companies, as they're being forced to pay the piper for their misconduct.
Credit card companies make big bucks from charing customers fees, but that pales in comparison to the fees merchants pay every time a transaction made. In the U.S. alone, retailers and financial companies that use credit card services pay over $90 billion in fees each year. That is an ill-gotten number that goes against anti-trust fairness.
The lawsuit was an anti-trust case that was traced back to 2005 when Visa and Mastercard first started being accused of misconduct for inflating their credit card use fees, all to enrich themselves when it wasn't necessary.
What were merchants to do? Refuse credit card services? That wouldn't have bode well for their business, since most people use credit cards to buy so much. The credit card companies operate as monopolies in our society. It's essentially a cartel, where whatever policies they implement and whatever fees they charge are the rule of law since they are so widely used by most people. The credit card companies have dominance over the purchasing abilities of consumers, and merchants have to accept it.
Customers haven't fought back against interest rates, but the merchants did. A $6.2 billion dollar bill isn't much to pay for over 13 years of abusing fees and raking in more than twice that amount each year. They are still in the green, so it's a drop in the bucket by comparison.
Mastercard paid the least amount at $108 million, while Visa had to pay the majority at $4.1 billion. When looking at cryptocurrency, it shows how much money credit card companies have as they can remain afloat despite such a huge bill. EOS's market cap is just under $5 billion. While most cryptocurrencies would be wiped out, credit card companies have no problem taking advantage of people with their corrupt price fixing policies. It took 13 years for them to have any consequences applied, and it's just a minor blip to their enormous profits.
Given the corrupt practices, who wants to trust credit card companies to do the right thing? They just get away with their shit for years. People should understand the blockchain as a trustless ledger potential to change how payments are done. Merchants surely benefits the most when receiving transactions, as the fees is being paid by the one sending, i.e the customer. More merchants should consider accepting Bitcoin and other crypto as forms of payment. They would save so much money compared to accepting the credit card monopolies in their businesses.
Thank you for your time and attention. Peace.
References:
- Credit Card Cartels Landed With $6.2 Billion Price-Fixing Bill
- Visa, Mastercard reach $6.2 billion settlement over card-swipe fees
- Visa, Mastercard reach $6.2-billion settlement over merchants’ credit card fees
If you appreciate and value the content, please consider: Upvoting, Sharing or Reblogging below.
My goal is to share knowledge, truth and moral understanding in order to help change the world for the better. If you appreciate and value what I do, please consider supporting me as a Steem Witness by voting for me at the bottom of the Witness page.
