Interchange is a governance fee, not a payment fee

The standard complaint about cards is that moving a few kilobytes of transaction data cannot possibly cost 2%. Correct — and beside the point. Interchange was never the price of moving data. It is the price of a governed marketplace.

What the fee actually funds: an issuer’s willingness to eat fraud losses under liability rules, a dispute process where an aggrieved cardholder has real power, rulebooks that force thousands of banks to interoperate, certification regimes, and the incentive for issuers to keep giving consumers cards at all. Strip the fee and each of those becomes someone’s unfunded mandate.

This is why “crypto is cheaper than Visa” arguments went nowhere for a decade: the comparison priced the message, not the governance. A wire that cannot be disputed is cheaper the way a car without brakes is lighter.

The agentic protocols now emerging will rediscover this line item. Someone must underwrite the moment an agent buys the wrong thing. Whatever that underwriting ends up costing, expect it to look a lot like interchange — whatever it gets named.