SlideServe
Télécharger Obtenir Pro
Menu
Accueil Pro
Préférences
ApparenceLight Aide et commentaires
© SlideServe · v2026

ANTITRUST AND INTERCHANGE

kimama avatar
kimama
12 diapositives · 277 Views · Sep 10, 2014

This analysis delves into the necessity of default interchange fees within Visa and MasterCard systems for their operational efficiency. It highlights how competitive forces dictate the level of interchange fees, countering antitrust concerns by suggesting that inefficiencies arise not from restricted output but from excessively high output. With a focus on two-sided markets, the discussion emphasizes the need for interchange fees to balance demand, alongside an exploration of the implications of cardholder loyalty and competitive dynamics between issuers.

ANTITRUST AND INTERCHANGE - slide 1
01 / 12ANTITRUST AND INTERCHANGE
1 / 17

Télécharger la présentation

ANTITRUST AND INTERCHANGE
Une image / un lien ci-dessous est fourni (tel quel) pour télécharger la présentation

Politique de téléchargement : le contenu du site vous est fourni TEL QUEL pour votre information et votre usage personnel ; il ne peut être vendu, concédé sous licence ni partagé sur d’autres sites sans l’accord de son auteur.Le contenu vous est fourni TEL QUEL, pour votre information et votre usage personnel uniquement. Téléchargez la présentation en cliquant sur ce lien. Lors du téléchargement, si vous ne parvenez pas à télécharger une présentation, l’éditeur a peut-être supprimé le fichier de son serveur.Pendant le téléchargement, si vous ne parvenez pas à obtenir une présentation, le fichier a peut-être été supprimé par l’éditeur.

F I N

Plus de contenu associé

Transcription de la présentation

  1. ANTITRUST AND INTERCHANGE Lacey Plache LECG

  2. Three Main Points • Default interchange fees are necessary for the functioning of the Visa and MasterCard systems. • The level of Visa’s interchange fees can be explained by competitive forces. • Contrary to antitrust concerns regarding price-fixing, the primary inefficiency claimed here is not that output has been restricted but rather that output is too high.

  3. Default interchange fees are necessary for the functioning of the Visa and MasterCard systems. • In two-sided markets, competitive pricing involves balancing demand on each side of the market. • Closed-loop payment card systems balance demand by setting cardholder and merchant prices. • Open-loop payment card systems must use interchange fees to balance demand.

  4. Default interchange fees are necessary for the functioning of the Visa and MasterCard systems. • “Honor-all-cards” is required for all payment card systems. • Given “honor-all-cards,” a multiple issuer system must set default interchange fees. • Otherwise issuers will have the incentive to raise their individual interchange fees to acquirers/merchants, imposing an externality on the system.

  5. The level of Visa’s interchange fees can be explained by competitive forces. • Interchange fees are used by open-loop payment card systems to competitively balance the two sides of the market. • Balancing led to lower interchange fees in the past and, since 1998, has led to higher interchange fees.

  6. The level of Visa’s interchange fees can be explained by competitive forces. • Past declines in Visa interchange fees cannot be explained by decreasing Visa market power. • Recent increases in Visa interchange fees cannot be explained by increasing Visa market power.

  7. The level of Visa’s interchange fees can be explained by competitive forces. • Past declines can be explained by Visa’s efforts to achieve “universal acceptance.” • Recent increases in interchange fees can be explained by increasing competition between Visa and MasterCard for issuers.

  8. The level of Visa’s interchange fees can be explained by competitive forces. • Increasing payment system competition has been caused by increased cardholder loyalty to particular issuers, thereby increasing issuer ability to shift cardholders between payment systems. • Competition for issuers intensified after 1998, as MasterCard and Visa competed for dedicated issuance.

  9. The level of Visa’s interchange fees can be explained by competitive forces. • Cardholders have received greater benefits (higher rewards and lower fees) from increased payment system competition and higher interchange fees.

  10. Contrary to antitrust concerns regarding price-fixing, the primary inefficiency claimed here is not that output has been restricted but rather that output is too high. • This inefficiency is not related to market power. • This inefficiency is not specific to the use of interchange fees, or even to payment card systems.