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Abstract: Theory of Credit Card Networks: A Survey of the Literature
Abstract
Theory of Credit Card Networks: A Survey of the Literature
The Review of Network Economics
Vol. 2, Issue 2 - June 2003, pp 50-68
Authors
Abstract
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Credit cards provide benefits to consumers and merchants not provided by other payment instruments as evidenced by their explosive growth in the number and value of transactions over the last 20 years. Recently, credit card networks have come under scrutiny from regulators and antitrust authorities around the world. The costs and benefits of credit cards to network participants are discussed. Focusing on interrelated bilateral transactions, several theoretical models have been constructed to study the implications of several business practices of credit card networks. The results and implications of these economic models along with future research topics are discussed.
Keywords: payment networks, credit cards, interchange fees, surcharges, banks
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