منابع مشابه
Credit card interchange fees ∗
We build a model of credit card pricing that explicitly takes into account credit functionality. We show that a monopoly card network always selects an interchange fee that exceeds the level that maximizes consumer surplus. If regulators only care about consumer surplus, a conservative regulatory approach is to cap interchange fees based on retailers’ net avoided costs from not having to provid...
متن کاملPayment card interchange fees and price discrimination∗
We consider the implications of platform price discrimination in the context of card platforms. Despite the platform’s ability to price discriminate, we show it will set fees for card usage that are too low, resulting in excessive usage of cards. We show this bias remains even if card fees (or rewards) can be conditioned on each type of retailer that the cardholder transact with. We use our mod...
متن کاملInterchange Fees in Credit and Debit Card Markets: What Role for Public Authorities? A Conference Summary
Credit and especially debit card transactions are on the rise worldwide. Interchange fees are an integral part of the pricing structure of credit and debit card transactions. Indirectly paid by merchants to card issuers, interchange fees in most countries are set by credit and debit card networks. But in one country, Australia, the central bank is regulating interchange fees, and in several oth...
متن کاملCredit Card Acceptance, Product Quality and Merchant Fees
This paper explores a reason why retailers pay such large merchant fees to credit card issuers. Credit cards as media of exchange are introduced to a New Monetarist model in which exchange occurs in alternating centralized and decentralized markets. Sellers who exert high (low) effort produce a good with a high (low) probability of being high quality. The quality of the good is revealed only af...
متن کاملMarket Structure and Credit Card Pricing: What Drives the Interchange?
This paper presents a model for the credit card industry, where oligopolistic card networks price their products in a complex marketplace with competing payment instruments, rational consumers/merchants, and competitive card issuers/acquirers. The analysis suggests that card networks demand higher interchange fees to maximize card issuers’ profits as card payments become more efficient. At equi...
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ژورنال
عنوان ژورنال: Journal of Banking & Finance
سال: 2010
ISSN: 0378-4266
DOI: 10.1016/j.jbankfin.2010.02.026