The problem arises when politicians intervene to regulate the interchange rates that retail merchants pay. Regulating payment card fees has political appeal to elected officials who are told by retailers who claim to be speaking on behalf of consumers. These merchants tell the political class that if they pay lower, regulated interchange rates, they will pass those savings on to consumers.
In country after country, the reality is quite different. Sure enough, retail merchants benefit from the lower fees. But those benefits are passed on to the retail merchants’ shareholders, not to consumers as promised. Consumers end up paying higher fees — either through “checkout fees” (surcharges at the register) or higher banking fees.
More Updates
How the “Credit Card Competition Act” Would End 250-Million Co-Branded Card in the U.S.
Electronic Payments Coalition
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General
The Not-So-Friendly Sen. Dick Durbin Amendment
Real Clear Markets
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General
Global Economics Group Releases Study of Impact of Durbin Interchange Fee Caps on Consumers
Business Wire
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Press Releases / Statements
Judge Agrees to Delay Ruling on Debit-Card Fees
Wall Street Journal
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