Merchants often argue that they pay higher prices than consumers to accept electronic payment instruments. They claim that interbank transfers (which are paid by the merchant's bank to the consumer's bank in electronic payment systems) artificially inflate the costs of accepting payment instruments. On the contrary, banks argue that these transfers are essential to encourage the use of electronic payment methods. Antitrust authorities are currently trying to regulate interbank transfers (e.g in the US, in Europe). This presentation will study the role of fraud prevention in regulation and analyze more precisely the incidence of liability regimes in payment platforms on fraud prevention effort.

References

• Rochet, J-C and Tirole, J. 'Two-sided markets: a progress report', RAND Journal of Economics, vol.37, 103-122.
• Verdier, M. 'Interchange Fees in Payment Card Systems: a Survey of the Literature', Journal of Economic Surveys.