This is why I was fired from Balanced Payments:<p>I understood exactly what the Federal judge eventually concluded -- that payments processing is becoming like a commodity (think web hosting), and that interchange fees have been unnecessarily bloated for a long time. There is no reason that any financial entity that processes a payment can justify 21 cents per swipe for the processing <i>swipe alone</i>. The swipe is the recording of the<p><pre><code> - cc #
- day/time/place of swipe or "submit payment"
- expiration date
- cvc code
</code></pre>
which when put together all add up to one little thing called an "auth" code. Maybe. . . 200 - 999 bytes for the swipe data alone.<p><i>Even though the Fed had initially proposed a cap of about 12 cents, the final rule was expanded to cover more items, including the cost of equipment and fraud-prevention technology (after an extensive lobbying campaign by the banking industry). That was improper, the court ruled.</i><p>All the other stuff -- the fraud detection items and whatnot are what companies should be competing (based on price) on.<p>The only way that this change could have been done was from the inside out: some high-tech "startup" from Silicon Valley could have been the first mover and propogated this change without any Federal intervention. But no: YC guys like the ones at Balanced we want to believe are "good" just are not; try to get them stand up for what's right and get fired and have your career damaged in a bad way.<p><i>The court decision could result in debit fees being cut by more than 50 percent, Guggenheim Partners said in a note to investors. Fees probably will revert to the 7 cents to 12 cents per transaction that the Fed had initially proposed, the note said.</i><p>But the sad thing is it probably won't matter. The merchants / marketplaces will get the windfall, or the banks processing payments will either way -- The average consumer will be none the wiser, and the cost savings will never get passed on to the end consumer -- always up in the chain.<p>More info about what exactly happened is here: <a href="http://intuitiveink.tumblr.com/" rel="nofollow">http://intuitiveink.tumblr.com/</a>