Interchange Fees

THE FUTURE FOR POS INTERCHANGE FEES

Published: May 2008
Pages: 190
Countries covered: Australia • Austria • Germany • Hungary • Italy • Mexico • Netherlands • New Zealand • Poland • Portugal • South Africa • Spain • Switzerland • UK • USA
Full report: £1,800 (printed format)

Download order form for 'The Future for POS Interchange Fees'

Rob Walker, RBR's payment systems expert, was interviewed by Dave Birch of Consult Hyperion on the topic of interchange fees and this new report. To listen to the interview, please click here.

POS interchange fees - which totalled nearly $64 billion (€48 billion) worldwide in 2006 - have been the subject of increasing analysis, controversy, legal actions and scrutiny by competition and other public authorities during the last 20 years.

The future for these fees is becoming increasingly uncertain. Major changes to POS interchange fee arrangements and fee levels are expected as the result of the actions of competition and other authorities, the implementation of the Single Euro Payments Area (SEPA), litigation by merchants and retailer associations and other drivers.

RBR’s new report provides an independent and informed analysis of POS interchange fees today, and how they will evolve in the future. It is essential reading for payment card organisations, banking associations, card issuers, merchant acquirers and merchants.

The report describes and comments upon the numerous recent competition and other public authority activities on interchange fees and related matters (such as MasterCard and Visa’s honour-all-cards and (no) price discrimination rules) in Australasia, North America and Europe. This includes independent detailed assessments of the recent MasterCard decision by the European Commission, the proposed "Credit Card Fair Fee Act" in the USA and the Reserve Bank of Australia's review of its payment system reforms.

The report provides insightful analyses into the trends in interchange rates/fees worldwide; and contains a series of strategic predictions on the future of POS interchange fees and related matters, including on:
•  Future actions by competition and other authorities and their likely outcomes.
•  The expected evolution in POS interchange rate structures and fee levels.
•  The impact of drivers such as SEPA and the “war on cash”.
•  The implications for payment card industry participants.

Outline of Report Contents:

• Executive Summary
• Introduction to Interchange Fees
• Interchange Investigations (EC, EPC, Eurosystem, Australia, Austria, Germany, Hungary, Italy, Mexico, Netherlands, New Zealand, Poland, Portugal, South Africa, Spain, Switzerland, UK, USA)
• Interchange Rate Analyses (Domestic POS, Intra-EEA, USA)
• Strategic Predictions (competition/authority activities, interchange rate structures and levels, SEPA, the "war on cash", implications for industry players)
• Appendices

PREVIOUS RBR REPORTS ON INTERCHANGE FEES:

Interchange Fees - The Hidden Dynamo of the Cards Business

Outline of Report Contents:

• Executive Summary
• Introduction to Interchange Fees
• Evolution of Interchange
• Analysis of Academic Arguments
• Analysis of Merchant Arguments
• Landmark Legal Cases and Investigations
• Analysis of Methodologies & Cost/Revenue Elements
• Interchange Fee/Cost Comparisons and Values
• Impact on Strategy, Industry Players & Competition
• Forces for Change
• Strategic Implications of Reducing or Banning Interchange Fees
• Appendices