Credit card interchange fees

Jean Rochet and Julian Wright

No 1138, Working Paper Series from European Central Bank

Abstract: 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 JEL Classification: E42

Keywords: credit card networks; credit card pricing; interchange fees (search for similar items in EconPapers)
Date: 2009-12
New Economics Papers: this item is included in nep-ban, nep-com, nep-net and nep-sea
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Journal Article: Credit card interchange fees (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20091138

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