AllianceDAO co-founder QwQiao has highlighted misconceptions about card network fees, such as those charged by Visa and MasterCard, which are often perceived to be as high as 3%. QwQiao clarifies that the actual portion of fees retained by these networks is minimal. Most rewards are directed to consumers to encourage credit card usage, while issuing banks attract users and acquiring banks bring merchants to the network. Despite receiving a small share, Visa and MasterCard benefit from economies of scale, allowing them to expand their networks at nearly zero marginal cost. Merchants bear the full cost due to their weaker negotiating position, making this one of the most powerful network effect cases in commercial history.
AllianceDAO Co-Founder Discusses Card Network Fees and Stablecoin Potential
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