Perfect Surcharging and the Tourist Test Interchange Fee

10 Pages Posted: 26 May 2011 Last revised: 19 May 2018

See all articles by Hans Zenger

Hans Zenger

European Union - Directorate General for Competition

Date Written: February 14, 2011

Abstract

Two widely discussed pricing benchmarks in the literature on payment cards markets are the "tourist test" interchange fee (Rochet and Tirole, 2011), which internalizes usage externalities in payment card markets, and "perfect surcharging" by merchants (Rochet and Tirole, 2002). This paper shows that these benchmarks are allocatively equivalent. Implications for the regulatory treatment of interchange fees and no-surcharge rules are discussed.

Keywords: Perfect surcharging, tourist test, interchange fee, payment cards, payment cards markets

Suggested Citation

Zenger, Hans, Perfect Surcharging and the Tourist Test Interchange Fee (February 14, 2011). Journal of Banking & Finance, Vol. 35, No. 10, pp. 2544-2546, 2011, Available at SSRN: https://ssrn.com/abstract=1845391

Hans Zenger (Contact Author)

European Union - Directorate General for Competition ( email )

Place Madou, Madouplein 1
Saint-Josse-ten-Noode/Sint-Joost-ten-Noode
Brussels, B-1049
Belgium

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
260
Abstract Views
1,698
rank
133,207
PlumX Metrics