Originally Posted by
mikesyr18
Competition has been fierce enough to strip AMEX of their former business model to something more similar to Visa and Mastercard's. Gone are the days of AMEX charging a percent or two higher than Visa/MC so they could provide a premium experience to card members. AMEX is now advertising more business friendly (especially small business) terms so they can be accepted in more places than ever.
I don't think it was competition that drove this change. It was AMEX's desire to increase profits by going more mainstream and increasing the size of their customer base.
Originally Posted by
mikesyr18
In the vast majority of places, there's at least four networks competing for business.
There are at most 4. Even in the US, one of them (Discover) is a bit on the weaker side, so there are really 3 that compete fiercely. In some other countries, there are fewer.
Originally Posted by
mikesyr18
Cellular phone service is the same way... But prices used to be much higher until T-Mobile came in and undercut everyone else. Now you can get a single line with unlimited data, talk, and text for $80 a month because competition (even in an oligopoly) can help lower prices.
Yes, price wars can break out in oligopolies, but they are rare and usually short-lived. I suppose one of the networks could start one if they wanted to, but I don't foresee it happening.
Originally Posted by
mikesyr18
Since Durbin we've seen a loss of debit card rewards programs (mostly), the addition of monthly maintenance fees on checking accounts, an increase in checking account fees, and I'll really go on a limb here - it caused networks and banks to raise awareness on how great credit cards are, since credit cards now generate interchange profits while debit cards ran through debit networks generate next to nothing. Really, it was a dumb decision to implement an amendment that only benefited the merchants who obviously would not pass the savings to customers.
So you believe that banks would pass on the savings to customers, but merchants won't?
Since the retail industry is far more competitive than the banking industry, the opposite is most likely true.
Durbin benefits all customers who buy goods and services, at the expense of the wealthier ones who are heavy credit card users.
Originally Posted by
mikesyr18
Durbin was created to benefit the merchants, strip the banks of some of their profits, and the consumer was thrown into the fire with the banks as well since regulation causes prices to rise.
Prices to rise? Do you have any evidence for this?