Interchange 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 other countries and areas, including the European Union (EU), Mexico, the Netherlands, Spain, and the United Kingdom, public officials are taking or are considering taking a more hands-on regulatory stance. And in the United States, it is largely the court system that is debating interchange issues. The payments industry has a strong vested interest in interchange fees. They are a major portion of costs that merchants pay for processing debit and credit card payments and are a major source of revenue for banks that issue the cards. One reason for recent interest in interchange fees in the United States is a shift in retail payments away from checks.