Aneace has been consistent in his themes that customer experience at the transaction point is a moment for differentiation, and that interchange revenues will be driven down through transparency.  The latter is the topic of his latest post.

Merchant coalitions appear to be shifting their strategy away from court mandated regulation of interchange fees, and appear to be moving instead toward greater transparency, making it clear to consumers how much merchants must spend on interchange, so as to set the platform for massive surcharging

Source: Aneace’s Blog: Why do merchants prefer credit card surcharges rather than cash discounts?

That interchange transparency is coming is (I think) driven by merchant restlessness, but I defer to the experts on that.  My comment to Aneace’s post ….

If I follow the logic, as interchange becomes transparent, consumers will react.  Presumably the next step after transparency would be merchants directing customers to the lowest interchange card.   This could have enormous consequences, and will drive interchange fees down.

The key is the extent to which merchants are getting restless.  I believe they are frustrated by high discount fees/ interchange, so that’s the next piece of this story.  Those revenues contribute to Bank revenue in many cases.