In this short comment, I provide my views on "The Effect of Regulatory Intervention in Two-Sided Markets: An Assessment of Interchange-Fee Capping in Australia" (published in this issue) that was presented at the Antitrust Activity in Card-Based Payment Systems: Causes and Consequences conference.

A payment instrument that disproportionately charges merchants (as with high interchange) can take business from others that offer the two-sided customer better deals. This competitive bias arises because merchants internalize cardholders' benefits (even without merchant competition). Use of an...