CÍMLAP
Keszy-Harmath Zoltánné [et al.]
The role of the interchange fee in card payment systems
CONTENTS, ABSTRACT
Contents
Abstract
1 introduction
2 Development and operation of the interchange fee
2.1 The four-party card system
2.2 Merchant and interchange fees
3 economic background of the interchange fee
3.1 Two-sided markets and network externalities
3.2 Usage externalities and interchange fee models
4 competitive assessment of the interchange fee
4.1 Competition related problems in connection with the interchange fee
4.2 Solutions other than the interchange fee
5 competition proceedings related to the interchange fee
5.1 Competition proceedings of the European Commission
5.2 Competition proceedings in Member States of the European Union
5.3 Competition proceedings and lawsuits in non-EU states
6 regulatory issues and attempts
6.1 Regulatory dilemmas
6.2 Example of regulation - Australia
7 The Hungarian payment card market
7.1 Characteristics and development of the Hungarian card business
7.2 Development level of the Hungarian card business in international comparison
7.3 Domestic interchange fees in Hungary
7.4 Comparison of Hungarian and international interchange fees
7.5 Profitability of the Hungarian payment card business
7.6 Merchant behaviour related to card acceptance
8 competition proceedings in Hungary
8.1 Conclusion of the agreement, parties
8.2 Decision of the GVH
9 regulatory attempts in Hungary
9.1 Regulation relating to the interchange fee and merchant fee
9.2 Regulation relating to surcharging
10 conclusions
10.1 Possibility of interchange fee regulation
10.2 Few practical examples for the time being, EU regulation is not expected in the near future
10.3 Important aspects of the Hungarian card market
10.4 Competitive effects on the acquirer market
10.5 Possible measures relating to the Hungarian market
References
Abstract
The interchange fee applied in four-party card systems transfers incomes in the payment card business from merchants to cardholders. Assessment of the interchange fee and the interpretation of its role have prompted serious professional debate in recent years. Beyond the professional debate, competition proceedings were also launched in connection with interbank agreements related to the interchange fee and the setting of the fee, but so far specific regulation has been adopted only in a few countries. The first part of the study describes the function of the interchange fee and the related economic theories, followed by a discussion of issues arising in connection with the interchange fee from the point of view of competition authorities and regulators. The second part of the study presents the results of analyses relating to the Hungarian payment card market and interchange fees. On the basis of these results, we conclude that prudent regulatory intervention, taking into account both primary and secondary market effects, may be justified in relation to the interchange fee, due to the structure and level of development of the Hungarian market.