Credit Cards and Payment Efficiency

13 Pages Posted: 18 Sep 2006

Date Written: August 2001


On May 22, 2001, the Payment Cards Center of the Federal Reserve Bank of Philadelphia sponsored a workshop on the role of interchange fees in the credit card industry. The workshop discussion, led by Dr. David Humphrey of Florida State University, explored the framework behind interchange fees.2 It then focused on several open questions that have arisen within both the academic research and international regulatory communities about interchange's impact on payment system efficiency. The paper that follows is supplemented by additional research and provides background information on interchange, a transaction-level overview of the credit card system that results in the extraction of interchange, and a summary of Dr. Humphrey's comments.

Keywords: Credit cards

Suggested Citation

Sienkiewicz, Stanley J., Credit Cards and Payment Efficiency (August 2001). Federal Reserve Bank of Philla Payment Cards Center Discussion Paper No. 01-02, Available at SSRN: or

Stanley J. Sienkiewicz (Contact Author)

Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

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