I like your line of thinking yet reality is somewhat different.
Surprisingly enough Visa and MasterCard, running on open-loop systems, sharing fees between member banks and the associations, are usually cheaper.

As a rule of thumb, most merchants end up paying higher processing fees when accepting closed-loop card brands. If you are indifferent and running on a fixed processing fee for accepting all card brands, try shopping around and check if that fixed rate is the best deal you can get.

Start your market survey at our domestic merchant account category. If you do your business on the road, an iPhone credit card app might be the solution for you.

I think the best way to explain it is to look into credit card processin history. The first credit card (issued by Flatbush National Bank of Brooklyn, NY), could have been used only by customers of same (issuing) bank at merchants who also maintained an account with the very same bank.

This is the essence of a “closed-loop” system – it all starts and ends at the very same place and in this specific case – the first issuing/acquiring bank. American Express, Diners Club & Discover keep working in the very same way – these banks provide both issuing and acquiring services, and cardholders holding these card brands can perform purchases with merchants who maintain a merchant account with these banks.

Visa and MasterCard provide networks through which different (non-related) issuing banks and/or acquiring banks can work. This open-loop system enables any member bank to issue and or acquire Visa and MasterCard cards all around the globe through the Visa and MasterCard networks.