A PYMNTS Company

The Drama of Interchange Fees

BY | March 27, 2008

This article is part of a Chronicle. See more from this Chronicle Vitor Bento, Mar 31, 2008 The main problem with the economics of card payments is that cash is…

This article is part of a Chronicle. See more from this Chronicle

Vitor Bento, Mar 31, 2008

The main problem with the economics of card payments is that cash is used as its yardstick and cash payments, being the most socially inefficient means of payment, are made available at a price significantly below cost (often free of charge). To supply cash payments at a loss and in order to remain a profitable business, banks have to overcharge other services (cross-subsidization). This practice is a leg

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