Please use this identifier to cite or link to this item: https://doi.org/10.1111/1756-2171.12007
Title: Why payment card fees are biased against retailers
Authors: Wright, J. 
Issue Date: Dec-2012
Citation: Wright, J. (2012-12). Why payment card fees are biased against retailers. RAND Journal of Economics 43 (4) : 761-780. ScholarBank@NUS Repository. https://doi.org/10.1111/1756-2171.12007
Abstract: I formalize the popular argument that retailers pay too much and cardholders too little to make use of payment card platforms, resulting in excessive use of cards. To do this, I analyze a standard two-sided market model of a payment card platform. With minimal additional restrictions, the model implies that the privately set fee structure is unambiguously biased against retailers in favor of cardholders, a result that continues to hold even if the platform can perfectly price discriminate on both sides. The market failure arising is primarily a regulatory problem and does not raise any competition concerns. © 2013, RAND.
Source Title: RAND Journal of Economics
URI: http://scholarbank.nus.edu.sg/handle/10635/124300
ISSN: 07416261
DOI: 10.1111/1756-2171.12007
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