TAILIEUCHUNG - Who Gains and Who Loses from Credit Card Payments? Theory and Calibrations

The main purpose of this report is to present the diversity and wealth of experience that savings banks have developed throughout Europe in the field of socially respon- sible activities. It illustrates this joint commitment with concrete case studies from a range of European countries, offering an overview of the fields in which savings banks are active, and providing examples of what they concretely do, how they inno- vate to adhere to stakeholders’ needs and diversify their initiatives. It also highlights the decisive contribution that savings banks make to communities development thanks to their locally focused project policy, based on the proximity. | Public Policy Discussion Papers FHDETTAL PESEtrvF DANK OF BOSTON No. 10-03 Who Gains and Who Loses from Credit Card Payments Theory and Calibrations Scott Schuh Oz Shy and Joanna Stavins Abstract Merchant fees and reward programs generate an implicit monetary transfer to credit card users from non-card or cash users because merchants generally do not set differential prices for card users to recoup the costs of fees and rewards. On average each cash-using household pays 149 to card-using households and each card-using household receives 1 133 from cash users every year. Because credit card spending and rewards are positively correlated with household income the payment instrument transfer also induces a regressive transfer from low-income to high-income households in general. On average and after accounting for rewards paid to households by banks the lowest-income household 20 000 or less annually pays 21 and the highest-income household 150 000 or more annually receives 750 every year. We build and calibrate a model of consumer payment choice to compute the effects of merchant fees and card rewards on consumer welfare. Reducing merchant fees and card rewards would likely increase consumer welfare. Keywords credit cards cash merchant fees rewards regressive transfers no-surcharge rule JEL Classifications E42 D14 G29 Scott Schuh is Director of the Consumer Payments Research Center and a senior economist in the research department at the Federal Reserve Bank of Boston. Oz Shy is a senior economist and a member of the Consumer Payments Research Center and Joanna Stavins is a senior economist and policy advisor and a member of the Consumer Payments Research Center both in the research department at the Federal Reserve Bank of Boston. Their email addresses are and respectively. This paper which may be revised is available on the web site of the Federal Reserve Bank of Boston at http .

• Ngân hàng - Tín dụng
• significantly higher
• previous history
• Tuberculosis
• aggressive opportunistic
• AIDS related
• diseases conditions
• Immunodeficiency virus
• Several studies
• antiretroviral drugs