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Interchange fees in card payments

Author

Listed:
  • Börestam, Ann
  • Schmiedel, Heiko

Abstract

The present paper explores issues surrounding multilateral interchange fees (MIFs) in payment card markets from various angles. The Eurosystem’s public stance on interchange fees is neutral. However, the Eurosystem takes a keen interest in facilitating a constructive dialogue among the stakeholders involved in this debate. Transparency and clarity with respect to the real costs and benefi ts of different payment instruments are indispensable for a modern and harmonised European retail payments market. Interchange fees (if any) should be set at a reasonable level so as to promote overall economic effi ciency in compliance with competition rules. JEL Classification: C43, E31

Suggested Citation

  • Börestam, Ann & Schmiedel, Heiko, 2011. "Interchange fees in card payments," Occasional Paper Series 131, European Central Bank.
  • Handle: RePEc:ecb:ecbops:20110131
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    File URL: http://www.ecb.europa.eu/pub/pdf/scpops/ecbocp131.pdf
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    References listed on IDEAS

    as
    1. Zenger, Hans, 2011. "Perfect surcharging and the tourist test interchange fee," Journal of Banking & Finance, Elsevier, vol. 35(10), pages 2544-2546, October.
    2. Robin A. Prager & Mark D. Manuszak & Elizabeth K. Kiser & Ron Borzekowski, 2009. "Interchange fees and payment card networks: economics, industry developments, and policy issues," Finance and Economics Discussion Series 2009-23, Board of Governors of the Federal Reserve System (U.S.).
    3. Humphrey, David B & Kim, Moshe & Vale, Bent, 2001. "Realizing the Gains from Electronic Payments: Costs, Pricing, and Payment Choice," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(2), pages 216-234, May.
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    Citations

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    Cited by:

    1. Carlos Arango & Yassine Bouhdaoui & David Bounie & Martina Eschelbach & Lola Hernández, 2013. "Cash Management and Payment Choices: A Simulation Model with International Comparisons," Staff Working Papers 13-53, Bank of Canada.
    2. Hasan, Iftekhar & Martikainen, Emmi & Takalo, Tuomas, 2014. "Promoting efficient retail payments in Europe," Research Discussion Papers 20/2014, Bank of Finland.
    3. Vilen Lipatov, 2015. "A Note on Partial Merchant Internalization and MIT Threshold," CESifo Working Paper Series 5684, CESifo Group Munich.
    4. Schmiedel, Heiko & Bolt, Wilko & Foote, Elizabeth, 2011. "Consumer credit and payment cards," Working Paper Series 1387, European Central Bank.
    5. repec:eee:ecmode:v:69:y:2018:i:c:p:38-48 is not listed on IDEAS
    6. repec:bof:bofrdp:urn:nbn:fi:bof-201511251450 is not listed on IDEAS

    More about this item

    Keywords

    interchange fees; retail payment systems; Trade credit and debit cards; two-sided markets;

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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