The War on Plastic

Abstract

The advantages of electronic transactions - swift, reliable, and silent - over clunky checks and bulky cash are apparent to consumers. Yet, the payment industry has been embroiled in a continuous procession of antitrust lawsuits in the United States and increasing threats from overseas. Antitrust law works best when it concentrates on horizontal agreements like bid rigging and price fixing. But, with these attacks on the payment card industry, governments are attacking business arrangements that make platform industries work.

Keywords: credit cards, debit cards, electronic transactions, payment card, payment industry, antitrust,, cooperatives, integrated firms, richard epstein, thomas brown

JEL Classification: D12, D19, D42, E51, L40, L41, L44