amance

Patrick, as someone with a startup in this space, I just want to say that your content is fantastic. I really appreciated reading this, and was unaware that Japan had a (pricing cartel?) with rewards. Is the market highly concentrated there as it is in the US? If it is indeed an inexplicable coordination situation, has there ever been any antitrust action in this space there?

No. Aggregate interchange for top-tier Visa and Mastercard personal cards maxes out at ~2.3%.

Corporate cards actually earn significantly higher interchange, but even those don't aggregate out above 3%. Actually, the networks spend a lot of time policing banks from trying to arbitrage the difference by issuing corporate cards to individuals.

Payment processors like Square just know that their margins will vary by the type of card used by consumers, but aim to have an aggregate positive margin across all cards. Once you get into enterprise contract negotiations with them though, they'll look at your card mix to make a pricing offer.

uuh... how is your daughter not a US citizen?