Mastercard and Visa is what we call the tollbooth on commerce. Instead of connecting two cities, they connect two banks. And rather than vehicles, they transport data. Even though they are on almost every credit card we see, they are not a credit card company. They don’t issue credit cards, nor do they make money from late fees or interest. They are otherwise known as the payment rails network.
So how do they make money? To understand that, let’s go through what happens when you tap your card at a Starbucks. There are five parties involved in this transaction:
Account holder (That’s you an...
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