Pricing Debit Card Payment Services
Pricing Debit Card Payment Services

Author: Wilko Bolt

Publisher: International Monetary Fund

Published: 2003-10-01

Total Pages: 35

ISBN-13: 1451874421

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This paper presents a theoretical framework for analyzing pricing structures in debit card schemes featuring cardholders, retailers, their respective banks, and a network routing switch. The network routing switch controls the electronic debit card network and is jointly owned by the banks. In setting its prices, it needs to consider getting both consumers and retailers to participate in the market. In this two-sided market for debit cards, we show that the "double-monopolistic" network routing switch may want to supply consumers with cheap debit cards, deriving profits from charging a high retailer fee per transaction. This theoretic result resembles the current practice in the Netherlands where consumers pay no transaction fee, but retailers do. This corner solution carries over when we analyze socially optimal pricing.

Pricing Debit Card Payment Services
Pricing Debit Card Payment Services

Author: Wilko Bolt

Publisher:

Published: 2011

Total Pages: 34

ISBN-13:

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This paper presents a theoretical framework for analyzing pricing structures in debit card schemes featuring cardholders, retailers, their respective banks, and a network routing switch. The network routing switch controls the electronic debit card network and is jointly owned by the banks. In setting its prices, it needs to consider getting both consumers and retailers to participate in the market. In this two-sided market for debit cards, we show that the double-monopolistic network routing switch may want to supply consumers with cheap debit cards, deriving profits from charging a high retailer fee per transaction. This theoretic result resembles the current practice in the Netherlands where consumers pay no transaction fee, but retailers do. This corner solution carries over when we analyze socially optimal pricing.

Pricing Electronic Payments Services
Pricing Electronic Payments Services

Author: Alexander F. Tieman

Publisher:

Published: 2011

Total Pages: 29

ISBN-13:

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In the Netherlands the enormous uptake in the usage of debit cards has been the main driver for the rapid developments in non-cash, point-of-sale, payments. However, several practices in the Dutch electronic payments services industry with regard to pricing and infrastructure have attracted controversy and antitrust scrutiny. In this paper we will present a theoretic framework to analyse pricing structures in debit card schemes. Cardholders value debit cards only to the extent that these are accepted by retailers, while retailers in turn benefit from a widespread usage of cards. This points to a fundamentaldimension of the market for debit cards, namely, that it is two-sided. In setting prices banks need to be careful to get both the consumers' side and retailers' side on board. We show that the consumers' side of the market can be used to generate an increase in demand for debit card payments, for which the retailers effectively pay. This theoretic results nicely corresponds to the current practice in the Netherlands that consumers pay no transaction fee for using their debit cards. Only the retailers pay such a fee. The question arises how this result compares to socially optimal prices, and how system competition between network switches affects this result.

Regulating to Reduce Merchant Service Fees
Regulating to Reduce Merchant Service Fees

Author:

Publisher:

Published: 2020

Total Pages:

ISBN-13: 9781990019753

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"Merchant service fees are charged to merchants by their bank for accepting some types of card payments. Scheme (MasterCard and Visa) credit card transactions, and contactless and online scheme debit card transactions, cost merchants more to accept than swiped or inserted debit card transactions. These higher cost payment methods have been growing as a share of transactions in New Zealand. Domestic EFTPOS provides price competition for some scheme debit products, but its use is declining... Merchant service fees, including interchange fees (which usually are the main component of merchant service fees), are unregulated in New Zealand. Over the years a complex pricing system has evolved, with multiple fees depending on the product and merchant. Other than for debit cards (swiped or inserted), weighted average merchant service fees are high relative to international comparisons. This remains the case even after changes by the schemes and participating banks to restructure their merchant service fees and increase transparency to provide better deals"--Executive summary.

Developing and Managing a Successful Payment Cards Business
Developing and Managing a Successful Payment Cards Business

Author: Jeff Slawsky

Publisher: Routledge

Published: 2017-05-15

Total Pages: 273

ISBN-13: 1351944924

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The credit card industry today is a multi-trillion dollar business that employs hundreds of thousands of people across the globe and impacts literally billions of people every day. Yet there is no comprehensive book or reference material available in the marketplace that provides fact-based perspectives on how to develop and manage a successful card business - despite the significant demand from all those involved in the industry. Developing and Managing a Successful Payment Cards Business offers information, analysis, observations, perspectives and advice on developing and managing a card business. There is comprehensive coverage of all areas including card business strategy, product development, customer acquisition and retention strategies, and product marketing techniques. The book also reviews underlying infrastructure components relating to operations and systems including risk management and transaction processing and suggests improvement techniques. There is detailed discussion on portfolio performance and profitability evaluation, as well as new technology developments and emerging payment systems such as chip cards and mobile payments.

Implementing Electronic Card Payment Systems
Implementing Electronic Card Payment Systems

Author: Cristian Radu

Publisher: Artech House

Published: 2003

Total Pages: 463

ISBN-13: 1580533051

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Radu, an electrical engineer who works as a consultant for payment systems and telecom operations in Belgium, has written a thorough description of EMV chip card technology. Following a description of chip migration with EMV and its use for debit and credit cards, Radu details the processing of such cards, including remote card payments, with attention to various formats. A lengthy section of appendices details the technology's security framework, threats, services, mechanisms, and risk management. Annotation copyrighted by Book News, Inc., Portland, OR