How will the dynamic between consumer-facing FinTech firms and processing platforms change and affect interchange fees?

Karim: I actually started my career in financial services, after the 2007, 2008 financial crisis. And one of the big things that came out of the crisis was just a huge Dodd-Frank set of new rules and regulations. And Durbin also came out of that. Well, if we're bailing out these banks, and they're making a lot of money on the backs of consumers, then that doesn't sound right. So we need to limit how much money they're making off of interchange. Right? And that started with the debit side and it's been the case for a long time.

Now you're seeing an interesting push. It seems like a lot of it is led by Jamie Dimon at JP Morgan, of trying to push the regulators to stop what he calls unfair competition from neobanks. Because a lot of them benefit from being sub Durbin and partnering with the tiny banks. 

More recently, there's been a lot of talks about changing the rules to even include restricting interchange from credit. But that only affects customers. So, in a funny way, I actually don't think regulators care, or frankly should care about businesses that much. I don't know how to say this lightly, but businesses die every other day, new ones get created. And, tough luck, that's okay.

But when customers get affected or get taken advantage of, I can understand the government wanting to step in to protect people. I don't understand a lot of the rationale behind curbing interchange rates. Because, at the end of the day, for many players, those interchange rates are transforming almost directly into rewards. So I think the most direct effect that I can see from that happening is companies having to reduce their rewards.

In the case of Ramp, because we're servicing businesses, we don't think there's a lot of change on the horizon with interchange. If anything, we see interchange rates going up. Visa and MasterCard were both slated to increase interchange rates before the pandemic. And they ended up delaying that. But it looks like this is still going to happen very soon this year. 

Although, if it did happen, and interchange rates were to change, frankly, as a company, we focus most of our efforts on delivering value through the product and the quality of the product. I think we would welcome it. We would do well in a world where rewards and points are no longer something that the larger banks can rely on.

So I think we're pretty well equipped, regardless. And I'm excited about the way things are going. But I don't expect interchange rates to go down for businesses any time soon.