Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Externalities and Regulation in Card Payment Systems

Externalities and Regulation in Card Payment Systems The paper offers a roadmap to the current economic thinking concerning interchange fees. After describing the fundamental externalities inherent in payment systems and analysing merchant resistance to interchange fee increases and the associations' determination of this fee, it derives the externalities' implications for welfare analysis. It then discusses whether consumer surplus or social welfare is the proper benchmark for regulatory purposes. Finally, it offers a critique of the current regulatory approach, and concludes with a call for more novel and innovative thinking about how to reconcile regulators' concerns and the industry legitimate desire to perform its balancing act. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Network Economics de Gruyter

Externalities and Regulation in Card Payment Systems

Loading next page...
 
/lp/de-gruyter/externalities-and-regulation-in-card-payment-systems-a0erIUbYwS

References

References for this paper are not available at this time. We will be adding them shortly, thank you for your patience.

Publisher
de Gruyter
Copyright
Copyright © 2006 by the
ISSN
2194-5993
eISSN
1446-9022
DOI
10.2202/1446-9022.1085
Publisher site
See Article on Publisher Site

Abstract

The paper offers a roadmap to the current economic thinking concerning interchange fees. After describing the fundamental externalities inherent in payment systems and analysing merchant resistance to interchange fee increases and the associations' determination of this fee, it derives the externalities' implications for welfare analysis. It then discusses whether consumer surplus or social welfare is the proper benchmark for regulatory purposes. Finally, it offers a critique of the current regulatory approach, and concludes with a call for more novel and innovative thinking about how to reconcile regulators' concerns and the industry legitimate desire to perform its balancing act.

Journal

Review of Network Economicsde Gruyter

Published: Mar 1, 2006

There are no references for this article.