A Theoretical Analysis of Credit Card Reform in Australia
The Reserve Bank of Australia (RBA) moved to reform credit card associations by increasing entry, allowing merchants to surcharge for card payments and regulating the interchange fee. We develop a simple model of payment systems designed to analyse the impact of these reforms. We build on the RBA's main assumptions and provide a justification for some of their concerns about excessive card use. Allowing merchants to surcharge may eliminate much of the concern over the interchange fee. On the other hand, the RBA's proposed interchange fee, based entirely on issuer costs, is unlikely to be socially optimal. Copyright 2003. The Economic Society of Australia.
Year of publication: |
2003
|
---|---|
Authors: | Gans, Joshua S. ; King, Stephen P. |
Published in: |
The Economic Record. - Economic Society of Australia - ESA, ISSN 1475-4932. - Vol. 79.2003, 247, p. 462-472
|
Publisher: |
Economic Society of Australia - ESA |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Access holidays and the timing of infrastructure investment
Gans, Joshua, (2004)
-
Perfect price discrimination with costless arbitrage
Gans, Joshua, (2007)
-
Paying for loyalty : product bundling in oligopoly
Gans, Joshua, (2006)
- More ...