Interchange Fees in Payment Card Systems: A Survey of the Literature

Verdier, Marianne

doi:10.1111/j.1467-6419.2009.00607.x

“…19 We analyze the case in which the consumer multihomes and the merchant singlehomes (see discussion in section 7 on this issue). We also follow the preceding model and assume that the overdraft cannot be used to pay off the credit line in period 2.…”

Section: Competition Between Debit and Credit Cardsmentioning

confidence: 99%

Consumer Credit and Payment Cards

Bolt

¹

,

Foote²,

Schmiedel

³

2011

SSRN Journal

1

0

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The future of retail payments: opportunities and challenges Terms of use: Documents in CONFERENCE ON THE FUTURE OF RETAIL PAYMENTS: OPPORTUNITIES AND CHALLENGESThe way people pay is continuously changing, as a result of innovations in retail payments, improvements in efficiency and regulatory changes. This changing environment creates opportunities for some and challenges for others in the retail payments sector. The impact of these changes on the future of retail payments was the main theme of the biannual retail payments conference organised by the European Central Bank (ECB), this time in cooperation with the Oesterreichische Nationalbank The European Commission's proposal for a regulation setting an end date for migration to SEPA credit transfers and SEPA direct debits is welcomed. For SEPA to be a success, it is essential that users are involved, in order to ensure acceptance of the SEPA instruments. Moreover, innovations in retail payments are taking place more rapidly than ever, and payment service providers and regulators need to adapt quickly to this changing business environment.We would like to thank all participants in the conference for the very interesting discussions. In particular, we would like to acknowledge the valuable contributions and insights provided by all speakers, discussants, session chairpersons and panellists, whose names can be found in the conference programme.

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“…There is a substantial literature studying interchange fees, such as Rochet and Tirole (2002). See Verdier (2011) for a recent survey.…”

mentioning

confidence: 99%

Explaining Adoption and Use of Payment Instruments by U.S. Consumers

Koulayev¹,

Rysman

²

,

Schuh

³

et al. 2012

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The way that consumers make payments is changing rapidly and attracts important current policy interest. This paper develops and estimates a structural model of adoption and use of payment instruments by U.S. consumers. We use a cross-section of data from the Survey of Consumer Payment Choice, a new survey of consumer behavior. We evaluate substitution and income effects. Our simulations shed light on the consumer response to the 2011 regulation of interchange fees on debit cards imposed by the Dodd-Frank Act, as well as the proposed settlement between Visa and MasterCard and the Department of Justice that would allow merchants to surcharge the use of payment cards. Terms of use: Documents in EconStor may JEL Classifications: E41, D41, D12Sergei Koulayev is an economist with Keystone Strategy, LLC.

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“…For the seller, a cash payment implies few direct costs (Castro, 2009;Lee, 2010), and the indirect costs, such as the storage costs, risk of loss, or risk of theft tend to be underestimated (Sanches and Williamson, 2010;Robinson and Hammitt, 2011;Singh et al, 2013). On the contrary, a credit or debit card payment is costly because of the terminal cost and transaction fee paid to the network (Verdier, 2011). The seller thus perceives a cash payment as less costly than a card payment (Chatterjee and Rose, 2012;Kamleitner and Erki, 2013).…”

Section: Introductionmentioning

confidence: 97%

Prices for cash and cash for prices? Theory and evidence on convenient pricing

Karoubi

¹

,

Chenavaz

²

2015

Applied Economics

6

0

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ACL-2International audienceA transaction between a seller and a buyer incurs a payment cost. The payment cost is borne by the seller, depending on the payment instrument the buyer chooses, cash or card. Card payment is more costly than cash payment, so the seller prefers that the buyer pays cash. In this article, we study the strategy of the seller setting a convenient price, which simplifies transactions and pushes the buyer to pay cash. The theoretical analysis, which models both the seller and the buyer in a game setting, derives two propositions: (1) the seller is more likely to set a more convenient price and (2) the buyer is more likely to pay cash a more convenient price. The empirical analysis supports both propositions. Thus, sellers adopt a convenience pricing strategy - prices for cash - and this strategy pushes buyers to pay cash - cash for prices

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Interchange Fees in Payment Card Systems: A Survey of the Literature

Cited by 73 publications

References 32 publications

Consumer Credit and Payment Cards

Consumer Credit and Payment Cards

Explaining Adoption and Use of Payment Instruments by U.S. Consumers

Prices for cash and cash for prices? Theory and evidence on convenient pricing

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