> The merchant is charging more to cover the fees. This is what everyone assumes, but it turns out it's false. We are fortunate to have some experimental evide

> The merchant is charging more to cover the fees. This is what everyone assumes, but it turns out it's false. We are fortunate to have some experimental evidence on this. In 2003 Australia slashed interchange fees through regulation. Prices did not decline. "...retailers saved more than $400 million (Australian) annually in fee revenue after interchange rates there were cut, but there was no evidence that they passed any of the savings on to consumers. Instead, consumers saw higher card fees, a reduction in loyalty benefits, and the introduction of surcharges of up to 3% on credit card transactions, the report found."[1] [1] http://www.digitaltransactions.net/news/story/Report_-Australian-Merchants-Don_t-Pass-on-Interchange-Savings http://www.digitaltransactions.net/news/story/Report_-Austra...