Interchange Fees in Credit and Debit Card Markets

Interchange fees associated with credit and debit card transactions have been the focus of much debate recently in a number of countries. This international conference brought together four principal audiences - industry participants, legal authorities, central bankers, and academics - for an exchange of views and thoughts. The following issues were addressed:
  • What are the functions of interchange fees?
  • What factors should be considered in evaluating credit and debit card pricing mechanisms?
  • Are there conditions when regulatory actions are warranted?
  • What role, if any, should central banks play in the business of interchange?
The conference was held at the La Fonda Hotel, May 4-6, 2005, in Santa Fe, New Mexico. Papers, remarks, handouts, and a listing of conference attendees are available below for viewing.

2005 Conference Program 

Forward Thomas M. Hoenig
President, Federal Reserve Bank of Kansas City

The Contributors 

Conference Summary  Barbara Pacheco
Senior Vice President, Federal Reserve Bank of Kansas City 

Richard Sullivan
Senior Economist, Federal Reserve Bank of Kansas City 

Conference Overview  Hendrik J. Brouwer
Executive Director
Interchange Fees in Various Countries: Developments and Determinants
| Paper | General Discussion |

Authors Stuart E. Weiner 
Vice President and Director of Payments System Research, Federal Reserve Bank of Kansas City
Julian Wright
Associate Professor, National University of Singapore
Discussant Alan S. Frankel | Commentary 
Senior Vice President, Lexecon 
Economic Rationale for Interchange Fees
| Paper | General Discussion |

Authors David S. Evans
Vice Chairman, LECG Europe
Richard Schmalensee
Dean, Sloan School of Management, Massachusetts Institute of Technology
Discussants Michael L. Katz | Commentary 
Professor, Haas School of Business, University of California, Berkeley
Jean-Charles Rochet | Commentary
Professor, University of Toulouse
Luncheon Address
Lloyd Constantine
Chairman, Constantine Cannon PC
Interchange Fees: Network, Issuer, Acquirer, and Merchant Perspectives
| Panel Remarks | General Discussion |

Moderator Avivah Litan
Vice President and Research Director, Gartner Research
Panelists Xavier R. Durieu
Secretary General, EuroCommerce
José Gabeiras
Chairman of the Board, ServiRed
John Gove
Director, TransAction Resources Pty Ltd
B.J. Haasdijk
Chief Executive Officer, Interpay
William Sheedy
Executive Vice President, Visa U.S.A.
Susan Webb
Executive Vice President, J.P. Morgan Chase
Keynote Address
Noah J. Hanft
General Counsel and Corporate Secretary, MasterCard International
Interchange Fees: Antitrust and Regulatory Perspectives
| Panel Remarks | General Discussion |

Moderator David A. Balto
Partner, Robins, Kaplan, Miller & Ciresi L.L.P.
Panelists Bernard Friess | Commentary 
Head of Financial Services Division, Competition Directorate-General, European Commission
Renata B. Hesse
Chief, Networks and Technology, U.S. Department of Justice
David Teal
Senior Competition Law Officer, Competition Bureau of Canada
John Vickers | Commentary 
Chairman of the Board, Office of Fair Trading
Interchange Fees: Central Bank Perspectives and Options
| General Discussion |

Thomas M. Hoenig | Commentary 
President and Chief Executive Officer, Federal Reserve Bank of Kansas City
Philip Lowe | Commentary 
Assistant Governor, Reserve Bank of Australia
Guillermo Ortíz | Commentary 
Governor, Bank of Mexico
Gertrude Tumpel-Gugerell | Commentary 
Member of the Executive Board, European Central Bank

Conference Attendees