We discuss and evaluate the incentives for vertical expansion and vertical mergers in the payments systems industry paying particular attention to the implications of the existence of network effects in this industry. We assess the incentives of large merchants to extend vertically into payments...

Interchange fees and related issues in credit and debit card markets have been the focus of considerable attention in recent years. The academic community has begun to address the economics of these markets. Public officials have begun to address the policy implications of developments in these...

Approximately half of credit card holders in the United States regularly carry unpaid credit card debt. These so-called "revolvers" exhibit payment behavior that differs from that of those who repay their entire credit card balance every month. Previous literature has focused on the adoption of...

Debit cards are overtaking credit cards as the most prevalent form of electronic payment at the point of sale, yet the determinants of a ubiquitous consumer choice-"debit or credit?"-have received relatively little scrutiny. Several stylized facts suggest that debit-card use is driven by...

In May 2005, the Federal Reserve Bank of Kansas City sponsored a conference, "Interchange Fees in Credit and Debit Card Industries: What Role for Public Authorities?" Conference participants included prominent industry executives, legal authorities, academics, and central bankers from around the...