EconPapers    
Economics at your fingertips  
 

THE IMPACT OF THE U.S. DEBIT-CARD INTERCHANGE FEE REGULATION ON CONSUMER WELFARE

David Evans (), Howard Chang and Steven Joyce

Journal of Competition Law and Economics, 2015, vol. 11, issue 1, 23-67

Abstract: The cost to U.S. merchants of taking payment on debit cards declined by more than $7 billion annually as a result of the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, while the effective cost to issuers of providing debit-card services to consumers increased by a corresponding amount. This article reports an event-study analysis of stock prices to determine the impact on U.S. consumers of the Durbin Amendment. Did consumers gain more from cost savings passed on by merchants, in the form of lower prices and better services, than they lost from cost increases passed on by banks, in the form of higher prices or less service? We find that consumers lost more on the bank side than they gained on the merchant side. Our estimate is that, based on the expectations of investors, the present discounted value of losses for consumers as a result of the implementation of the Durbin Amendment is between $22 billion and $25 billion.

JEL-codes: E42 G14 G28 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1093/joclec/nhu032 (application/pdf)
Access to full text is restricted to subscribers.

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: https://EconPapers.repec.org/RePEc:oup:jcomle:v:11:y:2015:i:1:p:23-67.

Access Statistics for this article

Journal of Competition Law and Economics is currently edited by Damien Geradin, J. Gregory Sidak

More articles in Journal of Competition Law and Economics from Oxford University Press
Bibliographic data for series maintained by Oxford University Press () and Christopher F. Baum ().

 
Page updated 2021-06-15
Handle: RePEc:oup:jcomle:v:11:y:2015:i:1:p:23-67.