Interchange fees and payment card networks: economics, industry developments, and policy issues

Ron Borzekowski, Elizabeth K. Kiser, Mark D. Manuszak and Robin A. Prager
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Elizabeth K. Kiser: https://www.federalreserve.gov/econres/elizabeth-k-kiser.htm
Mark D. Manuszak: https://www.federalreserve.gov/econres/mark-d-manuszak.htm

No 2009-23, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: In many countries around the world, electronic card-based payments have been replacing older types of payments at a rapid rate. In the United States, use of both debit cards and credit cards has been rising rapidly, while check volumes have been declining. The increased use of electronic payment methods has generated a number of public policy debates. One prominent debate concerns interchange fees. This paper is intended to provide background for understanding the interchange fee debate. The paper describes the operation of a typical payment card system, presents a summary of the economic theory underlying interchange fees, and discusses various developments in the U.S. payment cards industry, as well as legal and regulatory developments abroad. The paper concludes with a discussion and critical evaluation of a number of potential policy interventions.

Keywords: Electronic funds transfers; Interchange fees (Banking); Credit cards (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-cba and nep-net
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Citations: View citations in EconPapers (20)

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