How much money did you send your bank this year when you used your credit card?
Did you notice that you paid a $400 fee—one of the highest in the world?
Paying with a credit card seems simple. You swipe your card, wait a moment, and then grab your groceries and go. Yet behind the scenes, your trip to the grocery store initiates a complicated transaction—a vestige of a time when banks had to communicate by phone.
Over the next several days, two banks, Visa or Mastercard, and multiple intermediaries will communicate back and forth until money is moved from your bank to your grocer’s bank. And each bank and middleman charges a fee for their role.
You won’t notice this fee. It’s charged to the merchant, and your credit card is seemingly free to use. An issuer probably sent it for free, and promised you free stuff like cash back or airline miles if you use it.