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

25 Pages Posted: 7 Mar 2011

See all articles by Marianne Verdier

Marianne Verdier

Université Paris 2 Panthéon Assas

Date Written: March 3, 2011


This paper surveys the recent literature about interchange fees in payment card systems. Interchange fees are used by payment platforms to allocate the total cost of a payment card transaction between the cardholder's bank, the issuer, and the merchant's bank, the acquirer. Each time a consumer pays by card, its bank receives an interchange fee from the merchants' bank. Banks argue that interchange fees are needed to encourage the use of electronic payment instruments, whereas merchants claim that they artificially inflate the cost of accepting cards. This paper sheds light on the ongoing debate that opposes banks to the regulatory institutions or the competition authorities in various countries, by reviewing the theoretical results of the literature and highlighting some unanswered issues.

Keywords: Banks, Interchange fees, Payment card systems, Two-sided markets

Suggested Citation

Verdier, Marianne, Interchange Fees in Payment Card Systems: A Survey of the Literature (March 3, 2011). Journal of Economic Surveys, Vol. 25, Issue 2, pp. 273-297, 2011. Available at SSRN: or

Marianne Verdier (Contact Author)

Université Paris 2 Panthéon Assas ( email )


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