Like a stadium filling rockstar playing an after-hours gig in a small club, here I am again, writing the freeform and loosed-jam version of my recent LinkedIn article on the EU’s Interchange Regulations.
I know. I know. I spoil you. Bring back the 4th century Roman history, I hear you cry. No, today we must discuss interchange caps, the power of loyalty and where the money goes after you purchase something. I’ll maybe throw in some ill-researched but heartfelt swipes at the unintended consequences of legislation. Literary donuts of wisdom, sweet, moreish but empty, so empty.
I should declare an interest here…. I work in the finance industry. A hall of fame type position of veneration and respect in the world of payments. When middle managers get together at industry shindigs, delegates hang onto my every word, analysts attempt to interpret my utterances, stock markets fall or rise on the twitch of my eyebrows and my thoughts on the future of payments are listened to with hushed awe, due reverence and appropriate levels of obeisance and fawning.
Yeah; back to the narrative, Tim.
So, three years ago the EU lowered the amount of money card issuers can carve out of each transaction you make with a debit or credit card. This doesn’t apply to Amex who, like a greased otter, managed to slip the grasp of the regulations.
What this meant - dear readers - was that notional prices should have come down as retailers weren’t getting stung so much by deductions in the amount of money they paid for accepting cards.
Has this happened?
What do you think? The retailers passed on Jack. Of course. The card issuers facing a huge loss of revenue, hiked up card prices, interest rates and - this one hurts - reduced rewards and loyalty points.
So lose:lose for consumers. Well done legislators, another theoretical victory.
Naturally, my LinkedIn article is more nuanced, tempered as it is with ‘on the one hand and on the other’ corporate equivocation.
But I’ve lost my fucking Tesco Clubcard points! Bastards. Yes, they’re baubles paid for by a permanent rise in general prices but dammit! - where’s my points? I like choice and I like being savvy and I liked going to Chessington theme park courtesy of my Clubcard redemptions. Has anyone seen the prices these places charge using, like, real money?
I should point out here that the issue is more nuanced and involves many actors and the adoption of new technology to increase competition and choice in the medium term but, where’s my fucking points?
More sober financial analysis next week when I explain why running an economy on debt is both morally wrong and annoys my cat who’s a strict feline of the Austrian school.