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> Visa and Mastercard are taking a 3-4% cut of every single consumer payment made in much of the world. That ends up being a very, very big number.

I think you’re overestimating that rate, and by quite a bit. Mastercard’s fees seem to be between 0.2%-1.65%[0] depending on the card and transaction type.

I didn’t bother to look for Visa’s rate, but I’d imagine it’d be similar.

[0]https://www.mastercard.co.uk/en-gb/about-mastercard/what-we-...

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You are correct if you interpret "Visa and Mastercard" as literally Mastercard Incorporated and Visa Inc.

He used "Visa and Mastercard" as a metonymy for the entire payment processing network i.e. payment gateway + issuing bank + acquiring bank + card networks. The total fee for the entire network is indeed 3-4%, and as you rightly pointed out, Mastercard Incorporated and Visa Inc. fees actually only make up for less than half of the total transaction fees.

Of course the are not "taking" it either... they are issuing credit, allowing ease of purchase and providing fraud protection

That chart is for interchange fees, which is only one part of the fees a merchant will pay. It's the portion which is returned to the issuing bank.

It doesn't include the fees which go to MasterCard, nor does it include the fees paid by the merchant to their merchant bank.

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