To Surcharge or Not to Surcharge

To Surcharge or Not to Surcharge PDF

Author: Timothy H. Hannan

Publisher:

Published: 2017

Total Pages: 34

ISBN-13:

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This paper investigates depository institutions' decisions whether or not to impose surcharges (direct usage fees) on non-depositors who use their ATMs. In addition to documenting patterns of surcharging, we examine motives for surcharging, including both direct generation of fee revenue and the potential to attract deposit customers who wish to avoid incurring surcharges at an institution's ATMs. Consistent with expectations, we find that the probability of surcharging increases with both the institution's share of market ATMs and the time since surcharging was first allowed in the state, and decreases with the local ATM density. Further, we find evidence consistent with the use of surcharges to attract deposit customers who are new to the local banking market, but find no evidence that larger banks use surcharges as a means to attract existing customers away from smaller local competitors.

To Surcharge Or Not to Surcharge? A Two-Sided Market Perspective of the No-Surcharge Rule

To Surcharge Or Not to Surcharge? A Two-Sided Market Perspective of the No-Surcharge Rule PDF

Author: Nicholas Economides

Publisher:

Published: 2014

Total Pages: 47

ISBN-13:

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In Electronic Payment Networks (EPNs) the No-Surcharge Rule (NSR) requires that merchants charge the same final good price regardless of the means of payment chosen by the customer. In this paper, we analyze a three-party model (consumers, merchants, and proprietary EPNs) to assess the impact of a NSR on the electronic payments system, in particular, on competition among EPNs, network pricing to merchants and consumers, EPNs' profits, and social welfare. We show that imposing a NSR has a number of effects. First, it softens competition among EPNs and rebalances the fee structure in favor of cardholders and to the detriment of merchants. Second, we show that the NSR is a profitable strategy for EPNs if and only if the network effect from merchants to cardholders is sufficiently weak. Third, the NSR is socially (un)desirable if the network externalities from merchants to cardholders are sufficiently weak (strong) and the merchants' market power in the goods market is sufficiently high (low). Our policy advice is that regulators should decide on whether the NSR is appropriate on a market-by-market basis instead of imposing a uniform regulation for all markets.

New York

New York PDF

Author: Navin Vett

Publisher: Independently Published

Published: 2024-02-16

Total Pages: 0

ISBN-13:

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New York's historic Credit Card Surcharge Law has upended the financial landscape, leaving both corporations and consumers perplexed. Is it a revolutionary win for justice or a perplexing legal quagmire? This funny and instructive book cuts through the legalese and gets to the heart of the problem. Inside, you can find: For the wise shopper: Decode the jargon. Forget interchange fees and network assessments; instead, comprehend the legislation in plain English. Spot the surcharge sharks: Learn how to spot businesses that break the regulations. Cash or credit? Make informed decisions, avoid hidden fees, and optimize your savings. For company owners: Compliance made easy: Understand your alternatives and avoid expensive penalties. Navigate the gray area: Get simple answers to questions about gift cards, online transactions, and more. Keep your customers satisfied: Learn how to discuss surcharges successfully while maintaining loyalty. Future-proof your business. Stay on top of legal problems and developing interpretations. Get your copy now and say goodbye to credit card confusion, New York style! Remember, information is power, and in this financial jungle, you'll need a machete. Disclaimer: This book is intended for informational purposes only and does not provide legal advice. If you have any specific questions, consult a professional.

Fees and Surcharging in Automatic Teller Machine Networks

Fees and Surcharging in Automatic Teller Machine Networks PDF

Author: Elizabeth W. Croft

Publisher:

Published: 2010

Total Pages: 41

ISBN-13:

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This paper develops a spacial model of ATM networks to explore the implications for banks and non-banks of interchange fees, foreign fees and surcharges applied to transactions by customers at other than an own-bank ATM. Surcharging raises the price (foreign fee plus surcharge) paid by customers above the joint profit-maximizing level achieved by setting the interchange fee at marginal cost and not surcharging. Similar size banks would agree not to surcharge, but such an agreement is typically not possible between a bank and a non-bank. A high cost of teller transactions modifies the tendency towards high ATM fees.

Fees and Surcharging in Automatic Teller Machine Networks

Fees and Surcharging in Automatic Teller Machine Networks PDF

Author: Elizabeth W. Croft

Publisher:

Published: 2003

Total Pages: 39

ISBN-13:

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This paper develops a spacial model of ATM networks to explore the implications for banks and non-banks of interchange fees, foreign fees and surcharges applied to transactions by customers at other than an own-bank ATM. Surcharging raises the price (foreign fee plus surcharge) paid by customers above the joint profit-maximizing level achieved by setting the interchange fee at marginal cost and not surcharging. Similar size banks would agree not to surcharge, but such an agreement is typically not possible between a bank and a non-bank. A high cost of teller transactions modifies the tendency towards high ATM fees

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