To quote Hanlon’s razor “never attribute to malice that which is adequately explained by stupidity."
Having been involved in these conversations, I can tell you with some confidence, that banks are far more worried about being unable to deliver the technical work on time, than they’re worrying about interchange.
There will be fees to pay for OpenBanking Variable Recurring Payments, it’s not going to be free for merchants to use. Which makes sense, contrary to popular opinion, running a bank account, and transacting, costs quite a bit of money. Every Faster Payment you send costs your bank a couple of pennies, not much on an individual level, but it sure adds up.
It’s an extremely difficult problem to deal with because there is no dispute mechanism in the faster payment flow, and Faster Payments are not interested in adding one. As a consequence, once the payment is authorise, the moneys gone, and getting back is almost impossible.
Fraudsters have been taking huge advantage of this, and regulators are demanding that banks protect customers from these scams, or eat the cost of reimbursement.
Having worked on this specific problem, I can say that calling the customer for authentication is one of the most effective ways to prevent these scams. The call normally forces the customer to hang up on the scammer, which is incredibly powerful because it removes the primary source of pressure on the customer, and gives them space to think. Most customers then realise they’re being scammed, and stop there.
You may say that there’s other ways of warning customers, like in app notifications etc. Well I’ve tired all that, they’re not effective, regardless of how big, scary and red you make them. Even when tuned so the false positive rate is almost zero, so most customers only every see them when they’re actually about to be scammed, they still don’t work. Reason why they’re not effective, customer mentions what they see to the scammer on the phone, scammer explains it away and pressures the customer to continue.
This isn’t to say there isn’t some better balance, or that the banks aren’t being lazy. But the fraud question is serious one, and a very difficult one to answer. Simply ignoring it when discussing Open Banking is either naive, or intellectually dishonest (I’m not claiming that you’re intellectually dishonest, but there are plenty of people who like to gloss over the fraud issues, or just victim blame).
Right but that’s not a premium card and neither is Amex, so this doesn’t follow
Revolut Metal (personal) is not one of these cards.
Commercial cards (business banking, business credit etc) are what these cards are and they have less regulation in the EU.
For instance no cap on interchange fees and they can show prices excluding the card fee and add that on at checkout for business card users.
The company (or cardholder) pays for this - corporate cards and the like aren't free, they come with an annual fee. So it's not all on the merchant.
Corporate cards, or cards with more "features" (lounge access, insurance etc.) tend to have yearly fees associated with them, at least in Australia. I was under the impression the customer covers the cost of these extras, not merchants.
For example the Revolut Metal card which offers some lounge access on pay-to-use lounges, travel insurance, cashback is basically just a "Visa Signature" card.
Also note that mostly in the US and Europe AMEX works in another way than Visa and MasterCard. Where V and MC are in a 4 party model (Issuing Bank that gets interchange, Processor (like Stripe) that processes the payment and gets a cut, Merchant that pays the merchant discount rate (or processing fee) and the customer that got their card from their issuing bank getting some benefits) Amex mostly cuts out the issuing bank and issues the cards to the customers directly.
Hence because they don't have to share the interchange with the banks they offer way better benefits on their cards (airmiles, centurion lounges, travel benefits, extensive insurance) but also at a high cost for the merchant because these are really premium cards.
Some consumer banks do issue AMEX cards so they will get their interchange.
In Asia there's also Amex Debit cards, I think definitely less popular in the rest of the world.
Something to note, also a lot of people in Europe think Visa or MasterCard == a Credit Card, this is not true. A credit card is an actual revolving credit instrument issued to the consumer by a credit institution such as a bank that then uses Visa or MasterCard rails.
A card that you get from Lloyds or HSBC when you open an account in the UK might say Visa or MasterCard but it's on a prepaid or debit programme with the scheme but using Visa and MasterCard payment rails. The interchange on these (pre-brexit) and still in Europe is capped by law.
Furthermore a lot of EU, Latam and Asian countries have their local payment rails which run at way lower costs than Visa and MasterCard to the merchants (Wechat, Alipay, Giropay, Payconiq etc.. to name a few).
One last thing, I do think Open Banking in the UK and Europe, especially when Variable Recurring Payments are coming will be a game changer. The banks have been lobbying to delay most of the UX improvements for the users because they just make too much money as an issuer to get interchange.