Interchange Fees in Card Payments

58 Pages Posted: 10 Oct 2011

See all articles by Ann Borestam

Ann Borestam

European Central Bank (ECB)

Heiko Schmiedel

European Central Bank - Securities Settlement Systems Policy Division

Date Written: September 15, 2011

Abstract

The present paper explores issues surrounding multilateral interchange fees (MIFs) in payment card markets from various angles. The Eurosystem’s public stance on interchange fees is neutral. However, the Eurosystem takes a keen interest in facilitating a constructive dialogue among the stakeholders involved in this debate. Transparency and clarity with respect to the real costs and benefi ts of different payment instruments are indispensable for a modern and harmonised European retail payments market. Interchange fees (if any) should be set at a reasonable level so as to promote overall economic efficiency in compliance with competition rules.

Keywords: Trade credit and debit cards, retail payment systems, two-sided markets, interchange fees

JEL Classification: G21, D43, L13

Suggested Citation

Borestam, Ann and Schmiedel, Heiko, Interchange Fees in Card Payments (September 15, 2011). ECB Occasional Paper No. 131. Available at SSRN: https://ssrn.com/abstract=1927925

Ann Borestam (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Heiko Schmiedel

European Central Bank - Securities Settlement Systems Policy Division ( email )

Directorate General Payment Systems
Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany
+49-69 13 44 70 59 (Phone)
+49-69 13 44 60 00 (Fax)

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