Paper Info
Title
Impact of interchange fees on a nonsaturated multi-agent payment card market
Abstract
The impact that the level of interchange fees has on the payment adoption rate in a non-saturated market is investigated. This study is performed under different degrees of consumers' and merchants' awareness of the benefits arriving from the network externalities. In a four-party scheme, we model explicitly the interactions between consumers and merchants at the point of sale. The interchange fees flow from the acquirers to issuers. We allow card issuers to charge consumers with fixed fees and provide net benefits from card usage, whereas acquirers could charge fixed and transactional fees to the merchants. Merchant's transactional fees are determined proportionally to the level of interchange fees. We establish that, under this scheme, the two-sided nature of the market leads to higher adoption rates with lower interchange fees. Copyright © 2009 John Wiley & Sons, Ltd.
Year
DOI
Venue
2009
10.1002/isaf.v16:1/2
Int. Syst. in Accounting, Finance and Management
Keywords
Field
DocType
payment cards
Multi agent model,Computer science,Issuer,Point of sale,Network effect,Commerce,Payment card,Transactional leadership,Payment
Journal
Volume
Issue
Citations 
16
1‐2
1
PageRank 
References 
Authors
0.43
0
1
Name
Order
Citations
PageRank
Biliana Alexandrova-Kabadjova152.62