The interchange fee exists to rebalance the relationships within the two-sided market. In a competitive market for financial services, the interchange fee would be used to reduce the net consumer fee for credit cards.
But two-sided transaction platforms, like the credit-card market, are different. These platforms facilitate a single, simultaneous transaction between participants. For credit cards, the network can sell its services only if a merchant and cardholder both simultaneously choose to use the network. Thus, whenever a credit-card network sells one transaction’s worth of card-acceptance services to a merchant it also must sell one transaction’s worth of card payment services to a cardholder. It cannot sell transaction services to either cardholders or merchants individually. … To optimize sales, the network must find the balance of pricing that encourages the greatest number of matches between cardholders and merchants.