Antitrust & Competition Policy Blog

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

Friday, June 29, 2018

Are We Too Negative on Negative Fees for Payment Cardholders?

Joshua S. Gans University of Toronto - Rotman School of Management; NBER asks Are We Too Negative on Negative Fees for Payment Cardholders? Worth reading!

ABSTRACT: This paper examines regulator concerns that cash-paying consumers pay higher retail prices due to so-called ‘negative pricing’ of credit cards that emerge when cardholders face few fees but instead receive discounts, rewards and other inducements for using credit cards for transactions. It is argued here, however, that concerns that might arise in conventional markets over such pricing do not translate over to two-sided networks, of which card networks are a quintessential example.

https://lawprofessors.typepad.com/antitrustprof_blog/2018/06/are-we-too-negative-on-negative-fees-for-payment-cardholders.html

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