The Effect of Regulatory Intervention in Two Sided Markets: An Assessment of Interchange-Fee Capping in Australia

By Howard H. Chang on March 17, 2011

Howard H. Chang, Principal at Global Economics Group, Dr. David S. Evans, Chairman of Global Economics Group, and Daniel D. Garcia-Swartz, provide a detailed economic analysis of Australia’s decision to limit the fees that banks charge merchants for the use of debit and credit cards, or Interchange Fees. In The Effect of Regulatory Intervention in Two-Sided Markets: An Assessment of Interchange-Fee Capping in Australia, (Review of Network Economics, Vol.4, Issue 4 “ December 2005) the authors find that issuers have recovered between 30 and 40 percent of the loss of interchange fees in the short term, and that merchants have benefited from the lower fees but may not necessarily have passed those savings onto its customers. The Effect of Regulatory Intervention in Two Sided Markets: An Assessment of Interchange-Fee Capping in Aus…

About the Author

Name
Howard H. Chang
Title/Location
Principal, Chicago
Phone
312-533-4602
Expertise
Antitrust/Competition Policy, Financial Regulation