Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Tuesday, May 17, 2011

The Role and Regulation of Interchange Fees in European Payments

Posted by D. Daniel Sokol

The Role and Regulation of Interchange Fees in European Payments

The Role and Regulation of Interchange Fees in European Payments

15 June 2011 

Hotel Silken Berlaymont, Brussels 

If you’re interested in attending, please contact Abigail Adams at abigail.adams@pymnts.com. This conference is free of charge. Seats are limited and not all RSVPs will be accepted.

Interchange fees remain a subject of controversy in the European Union as well as other jurisdictions around the world.  Competition authorities and bank regulators have questioned the legality, or propriety, of setting these fees as well as whether merchants are being asked to pay too much. Merchants have also complained about these fees. The card schemes, and the banks that ultimately receive these interchange fees, say they are necessary for operating systems that maximize the value to consumers and merchants and for encouraging investment and innovation.

Against this backdrop the pioneering work on the economics of two-sided markets has delved deeply into the role these fees play in card schemes. A vibrant debate has resulted in that literature over whether there is a problem at all and, if the government is going to regulate interchange fees, how they should go about doing it.  New research is coming out frequently on this topic. 

Interchange fees are now a critical issue in the debate over the integration of payments and banking in the European Union as well as rising concerns that Europe is lagging in innovation in payments.  With the hoped-for success of the Single European Payments Area (SEPA) initiative worries have been raised over the future of the European domestic schemes and the prospects for a European-based scheme to become a leading player in Europe and elsewhere in the world. Regulation of interchange fees alters the business model for payments by eliminating a source of revenue from the merchant side of the business.   Whether and to what extent interchange fee regulation could alter incentives for the entry of new payment systems, of the pace and direction of innovation, is an important subject.

The purpose of this conference is to bring economists, policymakers, and innovators together to discuss and debate these important issues.  The conference will focus on four key questions:

  1. What's the role for interchange fees, are they needed, and how should regulation address these fees?

  2.  

    How does the interchange fee affect the pace and direction of innovation and investment in payments card systems? 
  3. How would the participants in the payments card systems respond to changes in interchange fees and how would those changes affect European consumers and merchants?
  4. What's the relationship between interchange fees and SEPA and what is the role of the interchange fee in the viability of new payment systems in Europe?

The Agenda

9:00 to 9:15|          Welcome Remarks

9:15 to 9:45 |         Keynote Speech, The Monnet Project and the Future of Payments in Europe

9:45 to 11:00 |      Role and Regulation of Interchange Fees

11:00 to 11:15 |    Coffee Break

11:15a to 12:30 | Innovation, Investment and Interchange Fees

12:30 to 14:00 |    Lunch: European Payments and Monetary Integration

14:00 to 15:30 |    Impact of Changes in Interchange Fees on Consumers and Merchants

15:30 to 16:30 |    Interchange Fees, SEPA, and Payment System Entry

Download the agenda, speakers, and complete information.

If you’re interested in attending, please contact Abigail Adams at abigail.adams@pymnts.com.  This conference is free of charge. Seats are limited and not all RSVPs will be accepted.

 

The Role and Regulation of Interchange Fees in European Payments

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