This essay surveys the economic literature on interchange fees and the debate over whether interchange should be regulated and, if so, how. We consider, first, the operation of unitary payment systems, like American Express, in the context of the recent economic literature on two-sided markets,...

Intro -- Contents -- Preface -- Acknowledgments -- 1 - Plastic Cards -- 2 - From Seashells to Electrons -- 3 - More Than Money -- 4 - From Gourmets to the Masses -- 5 - From Sardi's to Saks.com -- 6 - It Takes Two to Tango -- 7 - Co-opetition and the Payment Card Ecosystem -- 8 - System Wars --...

The European Commission's proposed payments card legislation and the common position reached by the European Parliament in April 2014 will harm competition, innovation, and consumers if broadly endorsed by the European Council in the coming months. The interchange fee price caps will soften...

A number of jurisdictions are considering imposing price caps on the interchange fees that card issuers receive from merchant acquirers when cardholders pay with their cards. Several have already done so. This paper examines the net impact of these price caps on consumers. The economics of...