The interchange fees summary report by federal reserve of Kansas City in 2005 examines trends in interchange fees, including credit cards and debit cards. What is the economic rationale for interchange fees? What opinions do participants in the payment system have about interchange? What role, if any, should central banks and other public institutions play in establishing or overseeing interchange fees?
The conference included people from all sides of the equation, including industry, banking, and government. The report includes an overview of the interchange system, how it works, and who gets what money. Key sections include:
– A four party card payment system
– Economic analysis of interchange fees
– Network issuer, acquirer, and merchant perspectives
– antitrust and regulatory perspectives
– panel of central bankers
Text includes discussion on pin debit and many important issues.
The summary concludes the need for intervention in the credit and debit card markets was hotly contested and finding a common ground will be difficult. There was agreement more transparency will be beneficial to participants and in the public interest.