How Mastercard Sets Its Interchange Fees

Lucas and Luna unpack the hidden pricing engine behind every credit card swipe: interchange fees. They walk through how Mastercard sets rates, why merchants pay 1.5 to 3.5 percent per transaction, and how the network balances the interests of banks, merchants, and cardholders. The hosts use concrete examples like a $4 latte and a $400 airline ticket to show how interchange works in practice, and they discuss recent regulatory pressure in Europe and the US that could reshape the model. Lucas explains the 'honor all cards' rule and why it locks merchants into accepting premium rewards cards. Luna brings data on how much retailers pass interchange costs into shelf prices — roughly $1,000 per year for the average household. The episode closes with a look at the Fed's 2023 debit-cap proposal and what it means for the future of network pricing. #Mastercard #InterchangeFees #PaymentNetworks #SwipeFees #CreditCardPricing #MerchantFees #DurbinAmendment #FedProposal #TwoSidedMarket #HonorAllCards #RewardsCards #Regulation #Business #PricingPower #FexingoBusiness #BusinessPodcast #LucasAndLuna #PodcastEpisode Keep every episode free: buymeacoffee.com/fexingo