In this paper we empirically address the issue of whether reductions in card payment interchange fees have a significant impact on prices paid by consumers. The answer to this question is at the core of most competition policy cases and regulations that have been applied to card payment markets....

Interchange fees in card payments are a mechanism to balance costs and revenues between banks for the joint provision of payment services. However, such fees represent a relevant input cost used as a reference price for the final fee charged to the merchants, who may be reluctant to accept cards...

This paper analyses market competition between two different types of credit card platforms: not-for-profit associations and proprietary systems. The main focus is on the role of the interchange fee set by not-for-profit platforms. We show that when the interchange fee is set so as to maximise...

This paper analyses market competition between two different types of payment schemes: card associations and proprietary systems. The main focus is on the role of the collective setting of the interchange fee by members of the association. We describe the sterilising role of the interchange fee:...

In this paper we empirically address the issue of whether reductions in card payment interchange fees have a significant impact on prices paid by consumers. The answer to this question is at the core of most competition policy cases and regulations that have been applied to card payment markets....

The paper analyzes two controversial features of the credit card industry. The first is the cooperative determination of the interchange fee by member banks in credit card associations (Visa and MasterCard). The interchange fee is the ``access charge'' paid by the merchants' banks, the...

We consider whether banks should be allowed to set different ATM prices to their customers depending on whether they hold an account on the bank. In Massoud and Bernhardt (2002), without considering an interchange fee, a ban on price discrimination on ATM services increases total surplus. In the...

With the purpose of measuring and monitoring systemic risk, some topological properties of the interbank exposures and the payments system networks are studied. We propose non-topological measures which are useful to describe the individual behavior of banks in both networks. The evolution of...

We analyse the distribution of the TARGET cross-border interbank payment flows, from both a cross-section and time series point of view, using average daily data for the period 1999-2002. We find out that first, “location matters”, in the sense that bilateral payment flows seem to reflect an...

The paper analyses the consequences of an isolated, sudden and unexpected failure of a bank in alternative interbank payment system designs. We assess the exposures and the contagion by a counterfactual analysis assuming that payments currently settled by the pan-European large-value payment...