But we don't live in bizarro-land where it's 7%, so we don't have to decide whether 7% or 15% would be profit-maximizing. But we can say for certain it's not 1.95%. The reason I feel that profit-maximizing is closer to 7% is the example of actual monopolies or duopolies.

Western Union, which cut its teeth on being a "an industrialized monopoly dominating the telegraph industry in the late 19th century" and in some areas I feel succeeded in establishing a money transfer monopoly, has rates close to 15% in some cases. Here is an economist talking about its remittance monopoly: http://therealnews.com/t2/index.php?option=com_content&task=...

So in areas where western union might have a literal monopoly, or a duopoly[2], they might set their price at around 12%. This is ridiculously high, and shows a monopoly level of pricing.

1.95% is a level that reflects a fair amount of competition, not at all a trust versus cash. You can argue till the cows come home, but you can see the actual monopoly or duopoly rates on this type of thing for yourself and compare.

[2] http://www.theguardian.com/global-development/2014/apr/16/uk...