The University of Southampton
University of Southampton Institutional Repository

Card payment systems and competition concerns: multilateral interchange fees and no-discrimination rules, a necessary evil?

Record type: Article

Purpose - to explore the competition issues arising from credit card payment systems under European Commission (EC) rules and suggest possible regulatory approaches.

Design/methodology/approach - the central role of credit cards in the modern economy is discussed from the viewpoint of the current methods of regulation through the no-discrimination rules (NDRs) and multilateral interchange fees (MIFs). Emphasizes the antitrust assessment of MIFs which takes account of comparative elements arising from the US market and briefly considers NDRs in order to emphasize their possible link with MIFs. Discusses the consequences of a possible abolition of MIFs in conjunction with alternative regulatory frameworks.

Findings - while it is true that both MIFs and NDRs represent blatant restriction on competition, economists have striven to emphasize the peculiar aspects of four-party payment networks as two-sided markets where, within such markets, competitive forces operate in a sui generis way to render MIFs and NDRs essential for the correct functioning of card payment networks. Concludes that the time is arguably ripe for a reassessment of the antitrust implications of MIFs and NDRs and empirical evidence appears to demonstrate both their anti-competitiveness and their non-essential nature for the functioning of card payment networks. Suggests that alternatives, such as bilateral negotiations between the members of card payment systems, could represent a feasible and more competition-friendly way to recover transaction costs for the members of a four-party card payment scheme.

Originality/value - clarifies some of the competition issues associated with the regulatory framework for credit card transactions in the European Union (EU).

PDF 80520LISTA20.pdf - Version of Record
Restricted to Repository staff only
Download (1MB)

Citation

Lista, Andrea (2008) Card payment systems and competition concerns: multilateral interchange fees and no-discrimination rules, a necessary evil? Journal of Business Law, 7, pp. 688-715.

More information

Published date: 2008
Organisations: Southampton Law School, Law

Identifiers

Local EPrints ID: 80520
URI: http://eprints.soton.ac.uk/id/eprint/80520
ISSN: 0021-9460
PURE UUID: 2dccae4a-824a-4c9e-a896-1e141cd6f6c0

Catalogue record

Date deposited: 25 Mar 2010
Last modified: 18 Jul 2017 23:13

Export record

Contributors

Author: Andrea Lista

University divisions


Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton: eprints@soton.ac.uk

ePrints Soton supports OAI 2.0 with a base URL of http://eprints.soton.ac.uk/cgi/oai2

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×