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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.

Credit Card Market: Economic Benefits and Industry Trends

In this study, “Credit Cards and Small Business: The Benefits, Opportunities and Policy Debate,” SBE Council Chief Economist Raymond J. Keating highlights key moments in the history of the credit card business, and notes how the modern system works. Keating looks at the “interchange fee,” and helps readers understand the economics of “two-sided markets.” He walks through the facts, the trends, the numbers, and the many benefits to small businesses.