In Canada, we have "bill pay" for utility, property tax, credit card, etc. but all that happens is your bank transfers money to the biller's account. The biller pays a bit for this service but evidently much less than the cost of handling physical checks as I've never seen a surcharge for it. Even the small town of 3,000 I live in is set up to receive property tax and water payments through this system.
Regardless of who makes your bill pay service or exactly how it works, my main advice if you use any bill pay service is to ready the fine print very closely and be sure you understand what you have to do to be covered (late fee reimbursement, etc) if a payment does get screwed up.
Obviously, Visa and Mastercard are trying to see if they can ruin the system.
I just paid some property taxes with one instead of ACH; keeps all of my accounting in one place in the card, and the payment is immediate instead of waiting for the ACH payment to wind its way through the antiquated Fed plumbing. Anyone who won’t take a CC, I’ll use Plastiq; they cut a check, I pay the CC fee, but it’s still rebated back.
They are negotiating with very few entities: just 2 (Visa and MasterCard) account for most card holders. Throw in Amex, and Discover if you want and you've covered nearly 100%.
Merchants don't have a lot of negotiating power, so they are really not in a position to dictate prices. Visa and MasterCard are in a position to dictate prices.
They regularly do crossovers and promotions to encourage people to use the cheaper ones.
>For banks, the $91.2 billion in fees they earn on credit-card portfolios is now more than the interest they charge on the loans.
The fees are ridiculous. Profit margins at restaurants are often 3-5% (per Google). There is still a cost to handling cash, but if cash cost ~1% all-in, their profits would go up 20-30%, just like that, assuming consumption stayed the same.
Fast food venues didn't accept credit cards for a long time, but eventually found people spent more paying with a card than cash. A $300 TV and a $5 hamburger "feel" exactly the same with cards, which certainly doesn't help consumerism in the US.
As an example, when I pay my property taxes, I can either pay by sending a check in the mail, doing an electronic check (ACH transfer that takes 2-3 business days to clear) and paying $0.25, or pay a 2% transaction fee. Stamps are $0.50, eventually I'll need to reorder checks (at a cost), so I do the ACH transfer.