The Effect of Regulatory Intervention in Two-Sided Markets: An Assessment of Interchange-Fee Capping in Australia

Howard Chang (), David Evans () and Daniel D. Garcia Swartz
Additional contact information
Howard Chang: LECG, LLC
Daniel D. Garcia Swartz: LECG, LLC

Review of Network Economics, 2005, vol. 4, issue 4, pages 328-358

Abstract: We examine the impact to date of the Reserve Bank of Australia's decision to reduce interchange fees on credit cards in Australia by almost half. We find that, in the short run, issuers have recovered between 30 and 40 percent of the loss of interchange fees. Merchants have benefited from lower fees but it is questionable whether those benefits have been substantially passed on to their customers. The per-transaction price at the point of sale has not changed significantly and there is relatively little evidence thus far that the intervention has affected the volume of card transactions in Australia.

Keywords: Interchange fee; Regulation; RBA; Australia (search for similar items in EconPapers)
Date: 2005
View list of references View citations in EconPapers

Downloads: (external link)
http://www.rnejournal.com/artman2/uploads/1/chang_et_al_RNE_dec05.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:rne:rneart:v:4:y:2005:i:4:p:328-358

Access Statistics for this article

More articles in Review of Network Economics from Concept Economics
Series data maintained by Shirley Carpenter ().