It is impossible for competition to work in the credit card industry when the customer decides what card to use but pays the same price whether his card costs the merchant 1% or 3%. In fact the customer benefits from the premium card that costs the merchant a higher fee. (And ultimately costs other customers as prices are raised to cover the cost)

Regulators who think that any real competition is at play have been duped. This industry cries out for regulation of the fees to merchants.