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ICLE: The Economics of Payment Card Interchange Fees and the Limits of Regulation

This study by Todd J. Zywicki identifies both the theoretical and actual failings of such debit regulation. Payment cards are a secure, inexpensive, welfare-increasing payment mechanism largely unlike any other in history. Rather than increasing consumer welfare in any meaningful sense, interchange fee legislation represents an attempt by some merchants to shift costs away from their businesses and onto card issuing banks and cardholders.

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