Khalaf: Merchants complaining about card interchange fees ignore massive ad tech costs
Simon Khalaf · Zach Perret (Plaid) & Simon Khalaf (Marqeta): New Applications in Fintech · Jun 20, 2024 · at 16:53
Simon Khalaf, CEO of Marqeta, compares transaction processing fees with digital ad spending, arguing that merchant complaints about credit card interchange are mathematically trivial compared to ad customer acquisition costs.
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“So regarding the payment rails, I agree with Zach. It's a yes, but the but is bigger than the yes, because if you look at, ah, all the folks that are honestly complaining about the interchange. Okay, let's talk about it. These are the same people who are paying Google and Facebook a dollar per click, and a 10% conversion to sell a 50 dollar item. So, I didn't fail basic arithmetic. So that is actually 20% tax on everything you sell. So the folks that are paying 20% are complaining about a 120 basis points. I'm like, come on, that when you buy advertising, you talk in percentages, not in basis points. So you're an order of magnitude off in terms of trying, what you're trying to optimize.”
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