It's been years since I had any connection to the conventional financial sector but I remain shocked by how many participants are involved in the flow of money, most of them fleeting and tangental yet each getting paid for the privilege.

I remember looking at the flow of cash from putting $100 into a 401(k) (US employer retirement plan) to the money actually getting invested. That drawing took up two whiteboards and as a result a few percent never made it into the market.

A good post about the Durbin Amendment in particular, which is pretty interesting on its own: https://kunle.app/feb-2022-children-of-durbin.html

Things are quite different in Europe, where EU interchange is capped at a much lower 0.3% for credit cards and 0.2% for debit cards for most transactions [0]. Despite this, banking fintechs are still thriving, such as Monzo*, N26, and Revolut.

* whilst Monzo is a UK bank, Visa/Mastercard still use the same EU domestic interchange rates in the UK post-Brexit, at least for now.

[0] https://en.wikipedia.org/wiki/Interchange_fee#European_Union