Abstract

http://ssrn.com/abstract=2052056
 
 

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Payment Card Interchange Fees: Assessing the Effectiveness of Antitrust Investigations and Regulation in Europe


Santiago Carbo-Valverde


Bangor Business School

José Manuel Liñares-Zegarra


University of St. Andrews - School of Management

May 6, 2012


Abstract:     
This article provides empirical evidence on the impact of different interventions by public authorities on interchange fees (IFs) and cross-border multilateral interchange fees (MIFs) on both adoption and usage of payment cards in the EU-27. Controlling for social and financial characteristics across countries, we find no statistically significant effects on payment card adoption. However, we find mixed results on payment card usage after specific regulatory events: IFs regulation and investigations seem to have increased the number of transactions per card, mandatory reductions in IFs seem to have a negative impact on the value of transactions per card, and antitrust and regulatory scrutiny related to MIFs is found to increase the number of transactions per card but to reduce the value of transactions per POS. Additionally, the results show that specific regulatory and antitrust investigations related to both IFs and MIFs have statistically significant effects on card transactions as a proportion of all transactions made in a specific country.

Number of Pages in PDF File: 39

Keywords: payment cards, interchange fees, adoption, usage, merchant, cardholders

JEL Classification: G20, D12, E41

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Date posted: May 6, 2012  

Suggested Citation

Carbo-Valverde, Santiago and Liñares-Zegarra, José Manuel, Payment Card Interchange Fees: Assessing the Effectiveness of Antitrust Investigations and Regulation in Europe (May 6, 2012). Available at SSRN: http://ssrn.com/abstract=2052056 or http://dx.doi.org/10.2139/ssrn.2052056

Contact Information

Santiago Carbo-Valverde
Bangor Business School ( email )
Bangor Business School
College Road
Gwynedd LL57 2DG, Wales LL57 2DG
United Kingdom
Jose Manuel Linares-Zegarra (Contact Author)
University of St. Andrews - School of Management ( email )
The Gateway
North Haugh
St. Andrews, Fife, Scotland KY16 9SS
United Kingdom
HOME PAGE: http://sites.google.com/site/jmlzegarra
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