These guys should start their own credit card transaction aggregator (ala Mint), and gather user data that is expressly made available for market research. Make the analysis for privacy tradeoff more explicit and distribute profits.
A credit card processor that charges 0% fee on transactions would have a huge advantage when pitching retailers.
However, that information would still be non-public and likely run afoul of insider trading. That said nothing prohibits companies from making this information public in real-time and maybe it makes sense for the SEC to require publicly traded companies to make this information public in real-time.
Whether a card processor's handling of financial transaction flow would be viewed as non-insider is something that I don't know. I can make reasonable arguments either way.
Exploiting a pricing failure eventually corrects it: buying up undervalued options eventually raises the price to where they're no longer undervalued. An important question is how much you can buy up before they're priced correctly and how much you can make off doing so.
It's possible that these two gentlemen were already exploiting the price difference to with an order of magnitude of its potential. Being able to reliably make ten million or so a year is pretty cool, but not enough to run a sizable business off of -- it might not even be worth it for the 'big boys' to exploit. If you could pull in hundreds of millions or billions of dollars a year, then you're talking -- but you'll be splitting it N ways, with everyone else who decides to exploit the same trick.
So why, you may ask, do we have such high fees for credit card transactions? And believe me: they ARE high. No more than a hiccup when debit card fees were restricted to roughly $0.15/transaction but CREDIT card fees (which use the same systems) continue to be a substantial fraction (a few percentage points) of every purchase.
It's because no one is pitching retailers. The cards are sold to the consumer (who pays nothing). The retailer pays, but the contracts they are offered do not give them space to do much other than refuse to take a type of credit card (and give up a bug chunk of their business) or to accept them and pay the fees.
If you make the product really attractive to merchants, then you will have a problem getting customers. You will have to compete with the existing credit card products. Banks make a lot of money on those existing products and are highly motivated to ensure that the product you propose never, ever gets off the ground. History shows that they are both willing and able to (a) use this money to "buy" customers over with bonuses that you won't be able to match because you aren't charging the merchants so much; and (b) aggressively try to keep you out of all the infrastructure - there are many 'moats' that they control, including the large settlement systems, technical infrastructure installed at merchants (forget about using the same POS terminals to read your cards and Visa/MC, even if it's technically easy), etc.
There have been and are many attempts to make new alternative card products, but they aren't realistic to succeed. EU considers a wish for such a card system every couple years, but it turns out to be unfeasible even given the combined financial resources of the interested governments. Right now Russia has a strong motivation to support and subsidize such a system, but again, they don't want it that much to warrant the huge expenses for the relatively low expectations of success.
It probably saves us thousands to tens of thousands of dollars each year and we don't even have a huge amount of revenue.