http://www.nytimes.com/2010/01/05/your-money/credit-and-debit-cards/05visa.html
We do a lot of work in this space and there's lots of room for innovation and designing for users. I was struck by the sentiment in the article that interchange is a God-given right. Hmmm... maybe...
Certainly banks and the associations have real expenses and there is a value they are providing. They should absolutely have a right to capture and compete for that value.
Yet the idea that this situation is inevitable could be a dangerous one to hold onto too dearly within these companies. There are lots of smaller players out there that would gladly halve those fees and take a percentage of the now smaller amount. It's a good message to broadcast to keep competitors at bay and vendors placated...
There are some firms trying to do it, but that are having trouble competing effectively quite yet. The barriers and scale benefits are still difficult for these entrants to overcome. But some big folks, Google among them, are playing with payments.
Where else is there an "inevitable system constraint" in this industry or any industry?
It could point us to other disruption opportunities.
