> But they're not competitors. They just happen to provide the same service.

Why are they not competitors?

I might be way out there, but if two companies provide the same service (even if they vary slightly), they are competitors.

Because there are only 2 companies in the industry with huge moat - https://www.jstor.org/stable/4225650?seq=1#page_scan_tab_con...

It's the same reason why airlines don't compete with each other.

The price of flights to Hawaii just dropped because SouthWest is starting a new route there. How is that not competition?

They are competitors, but it's not a zero sum game. There are plenty of consumers who have both.

Look at AMEX, which has been rebuked by many merchants due to higher fees. The biggest risk for Visa & MC in doing this is that AMEX might begin to seem more swallowable for merchants.

Amex actually lowered their fees to be more in line with Visa/MC through its Optblue program back in 2015. The fact that many businesses don't know that is just a testament to the complexity and confusion in the industry.

Source: am in the industry.

Would that mean that after Visa & MasterCard do this, AMEX will actually be the better option for merchants?

We don't know which rates Visa/MC are actually raising yet, but probably not. It has a lot to do with how/what processors charge.

Along with lowering costs, Optblue let processors add a markup to Amex transactions. (Previously they couldn't. That meant no incentive for processors to suggest or push Amex acceptance, as they didn't make money on Amex transactions.)

Now they can, and those markups tend to be higher than for Visa/MC. In egregious cases, the processor simply continues charging the business the old Amex rate (~3.5%) and pockets the entire difference between 3.5% and the new lower rates.

Rumor has it that Opt Blue Wholesale rates are going up by 10 pts in a few months

They aren’t competitors? Well, they definately aren’t complimentary services (ie peanut butter and jelly).

Well merchants and consumers aren’t the competitors of visa/MC. Maybe they should cooperate by lowering the fees. If cooperation is the way to maximize profits...or does that only work when two companies collude to price fix?