Merchant internalization and tax evasion

Jose Aurazo

Research in Economics, 2020, vol. 74, issue 4, 273-276

Abstract: Merchant internalization has been used to explain why merchants may accept high fees to accept card payments. However, merchants seem to be more resistant in some economic activities or countries; in particular, when the shadow economy is sizeable. Cash payments are usually associated with tax evasion, and therefore the analysis of card industry should take it in to consideration. This paper explores the role of tax evasion in the merchant internalization condition; first, considering it as exogenous, and then, as a strategic reason.

Keywords: Merchant internalization; Payment cards; Tax evasion (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:74:y:2020:i:4:p:273-276

DOI: 10.1016/j.rie.2020.06.002

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