Interchange
Around the world regulators and competition authorities
have become increasingly interventionist in the card
payments business. In the vanguard has been the Australian
Reserve Bank, which has intervened in their domestic
market to set credit card interchange and also to refocus
the dynamics of the debit card commercial framework.
In Europe regulators have intervened in many countries
(particularly in ‘Western’ Europe), with
varying degrees of impact. Austria, where Europay has
been deemed an illegal cartel; Spain, where the three
card schemes have been refused exemption from anti-trust
legislation; and Switzerland, where a new interchange
regime has been forced on issuers, have all seen significant
regulatory investigations in recent years.
Retailers have lobbied strongly to reduce the level
of MSCs and have driven regulatory activity on interchange
in Belgium; the Netherlands, where large fines have
been meted out to Banks; and Norway, where MSCs have
been under review for some time.
Political activity has also acted as a stimulus for
regulatory action particularly in Denmark, where the
politicians imposed domestic debit card fees, and to
a degree in the UK, where Parliamentary Committees have
come into play. Other countries with a history of intervention
include Italy, where the interchange rate set by CO.GE.BAN.
has been regulated, and Sweden, where regulatory action
created an open market in the mid 1990s.
PSE has carried out a wide range of assignments and
research activities into interchange and two sided markets.
We have helped clients understand the implications of
potential changes, analysed different interchange structures
for ATM, POS and ACH payments.
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