No I’m not wrong. Banks make a tiny amount on the transaction. They make most of their money on the interest.
Banks make so much money on transactions, they even came out with new “incentive” programs a few years ago, targeted at purchasers.
Already charging vendors 3-5% for each credit card transaction, they then began incentives to increase credit card purchases, offering government agencies a 1-1.5 % kickback for making purchases via credit cards (P-Cards), as opposed to the normal standard of net 30 payment terms.
No, I don't think banks make most of their money on “interest rates”.
They make steady money on the volume of transactions between their “customers”, both the buyers and sellers of tangible products.
There is even a built in legal clause banks have engineered against merchants who already pay bank fees to process credit/debit cards.
No discounts can be offered for cash transactions.No premiums or handling charges can be made for credit/debit card transactions.
Banks, Insurance Agencies, Unions...are all related in the sense that they introduced a short term artificial financial benefit, that eventually became a long term burden to all commerce, and now pervades society.
I would guess your definition of “interest” and mine are not the same.