ACQ2 by Acquired Visa Follow-Up and Today’s Payments Ecosystem (with Gaurav Ahuja)
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Dec 3, 2023 Gaurav Ahuja, co-founder of Imprint and General Partner at Thrive Capital, dives deep into the evolving payments ecosystem. He shares insights on whether Visa should fear eroding interchange fees and examines the rising influence of real-time payments. The conversation highlights the challenges and opportunities for startups, as well as the potential for new players to disrupt the Visa and Mastercard duopoly. Ahuja also explores the critical role of co-branded credit card programs in driving customer loyalty.
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Interchange Fees
- Interchange fees, crucial for credit card rewards, haven't significantly declined recently, suggesting market equilibrium.
- This stability stems from a balance between banks wanting higher fees and merchants wanting lower fees.
Credit Card Economics
- Banks view credit cards holistically, considering both interchange fees and potential interest revenue.
- They tolerate "transactors" who pay in full because these users might use other bank products.
Durbin Amendment and Fintech
- The Durbin Amendment allows smaller banks to charge higher debit interchange fees, fostering fintech innovation.
- Fintechs partner with these banks, potentially facing scrutiny as they grow, but also offering better services.