Interchange Fees In Australia, The UK, And The United States

Fumiko Hayaski and Stuart E. Weiner of the Federal Reserve Bank of Kansas City have published an article in the bank's Economic Review titled "Interchange Fees In Australia, The UK, And The United States" (PDF). According to the abstract, "Interchange fees are an integral part of the pricing structure of credit and debit card industries. While in recent years the theoretical literature on interchange fees, and payment cards in general, has grown rapidly, the empirical literature has not. Hayashi and Weiner seek to provide a bridge between the theoretical and empirical literatures on interchange fees. Specifically, they confront theory with practice by asking, to what extent do existing models of interchange fees match up with actual interchange fee practices in various countries? The results suggest that a theory applicable in one country may not be applicable in another and that similar interchange fee arrangements and regulations may well have different implications in different countries."