The US is the second largest cards market in the world as measured by spend, with $9.6 trillion in card volume (2022), nearly double that of Europe. Important contributor to the massive US credit card market is significantly higher interchange rates than in Europe, which issuers use to fund aggressive rewards and cashback propositions to encourage consumers to use their credit cards, which creates a virtuous “flywheel” effect
European regulators have been aggressive in seeking to reduce merchant acceptance costs, and capped intra-EU consumer card interchange at 0.20% for debit and 0.30% for credit.
Regulation of interchange effectively killed card-based reward schemes in Europe, leading to steep declines in many issuers’ credit card portfolios
