A good article, and something that deserves more attention. One aspect that the article didn't cover (or possibly glossed over, or even got wrong) is that the interchange fees are not flat, but actually set per card.
If you use a card with a high rewards program, someone on the charging side directly pays more (or rather, receives less) than they would have if you used a non-rewards card. Sometimes this is the merchant, if they have an agreement to pay the true costs plus a small percentage. Or sometimes this is the merchant's processor, who charges the merchant a higher flat fee and hopes the averages work out in their favor.
In my mind, it's easier to think of it as the merchants who are bearing the brunt of the rewards program costs. Their rational response is to raise the prices for everyone, which causes inflation. A few people with good credit who play the game right come out a little ahead, the card networks make billions, and everyone else pays 1-2% more for practically everything they buy off the shelf.
If you use a card with a high rewards program, someone on the charging side directly pays more (or rather, receives less) than they would have if you used a non-rewards card. Sometimes this is the merchant, if they have an agreement to pay the true costs plus a small percentage. Or sometimes this is the merchant's processor, who charges the merchant a higher flat fee and hopes the averages work out in their favor.
In my mind, it's easier to think of it as the merchants who are bearing the brunt of the rewards program costs. Their rational response is to raise the prices for everyone, which causes inflation. A few people with good credit who play the game right come out a little ahead, the card networks make billions, and everyone else pays 1-2% more for practically everything they buy off the shelf.