I ask why would I care because banks invest heavily in making sure customers know on which circuit their cards operate on. However, most places accept both MasterCard and Visa (and potentially others, depending on the country).
In: Economics
Visa and MasterCard are “platforms.” That is, they are the middlemen that connect buyers to sellers. Platforms generally compete with one another by trying to make the biggest network possible. For example, think about the Uber platform: the more drivers it has leads to more passengers which leads to more drivers and on and on. The same thing is happening with credit cards: the credit card providers make the most money when they can shift as many purchases as possible happen on their credit card (the get a very small percentage of each sale, but they add up fast) instead of with cash/competitors. So the credit card companies have to balance out the incentives on the two sides of the market (shoppers and sellers) to grow the network as big as possible.
As for you, the consumer, this is a great thing. For the most part, sellers are willing to pay for access to customers. If accepting credit cards means that they will make more sales (think about, say, an Etsy store), then they’re willing to pay a small amount of their revenues to credit card companies to seamlessly facilitate the transaction.
Because the sellers are willing to pay to have access to credit card networks, that creates lots of money to operate the credit card platform. Some of that money is used to pay the companies that process the transactions (the companies that own the machines that swipe cards are typically not owned by the credit card companies themselves). Some of that money is profits.
And lots of that money is used to incentivize customers to sign up and use their credit cards. Rewards points, insurance programs, lounge access, personalized card designs, etc. are all indirectly funded by the other side of the market. The network is growing by transferring some money from sellers to cardholders.
The credit cards companies are crafty, though. The have ensured that stores are not allowed to charge you a fee for using your credit card as compared paying with another form of payment (like cash). That is, they can’t make a specific card user pay the fees associated with that card. This means that stores increases ALL of their prices on average to cover the costs of people generally using credit cards, regardless of whether or not you, specifically, are using a credit card for your order.
Assuming you aren’t dropping millions of dollars on your credit card at your local convenience store, this means that your individual choice to use a credit card will never have any impact on any price you see (you’re just a drop of water in the ocean), but you can reap lots of rewards from signing up for the right the card and paying it off in full every month.
TDLR: credit cards are platforms which connect sellers to buyers and make their money by maximizing transactions. Since sellers want more buyers, they’re willing to pay to get them, and credit card companies transfer some of that willingness to pay to customers in the form of credit card incentives. Their competing means you, the consumer, get card perks.
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