Is 2-3% the right fee for payments

Designing payment systems from the ground up should consider various factors such as credit risk, fraud prevention, dispute resolution, and customer protection, which typically lead to transaction fees around 2-3%. This range seems to stabilize due to the costs involved in managing these elements. Several countries are currently exploring national payment schemes inspired by successful models like India's UPI and Brazil's Picks, showing rapid adoption and user engagement. The transaction fees often include surpluses that are returned to consumers in the form of rewards, complicating the perception of them as a straightforward cost. There’s little evidence that fees in the 2-3% range result in significant inefficiency, suggesting that while an optimal fee might be debated, this range remains reasonable for the various services provided. Overall, the evolving landscape reflects a reinvention of payment systems that balance costs, consumer benefits, and economic viability.