People always cite the first-order benefits of this regulation but don't look into anything else. To be clear, I haven't either but what I would look for is:
- are real prices cheaper for consumers?
- is economic activity higher or lower (i.e. maybe credit cards encourage purchases?)
- does making credit cards a less lucrative business lower credit card penetration?
- is lowering credit card penetration, particularly for people bad at doing interest math a good thing?
- is making cash or debit cards relatively more appealing good?
My vague impression is that the studies on these questions are mixed (am I wrong? A quick Google found several EC funded ones which I'm a little suspicious of). Note that the US has 4 credible payment processing networks but the fees have remained constant. My suspicion is that 3ish% is the optimal value or a very large anti-trust investigation (not a price cap) is in order.
My vague impression is that the studies on these questions are mixed (am I wrong? A quick Google found several EC funded ones which I'm a little suspicious of). Note that the US has 4 credible payment processing networks but the fees have remained constant. My suspicion is that 3ish% is the optimal value or a very large anti-trust investigation (not a price cap) is in order.