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The Regulation of Payment Cards: The Mexican Experience

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  • Negrín José L.

    (Banco de México)

Abstract

We present a review of the regulation of general acceptance payment cards in Mexico. We find that there are distortions that may justify public intervention. The market for payment cards is underdeveloped and the usage of debit cards at POS is restricted. Also, the structure of the interchange fee (IF) may hinder POS deployment and limit debit card usage. Banco de Mexico (BM) has regulatory jurisdiction over the payment systems. BM has introduced transparency in banks' charges and removed restrictions to participation. Regarding IF, the Association of Mexican Banks has reduced it without direct regulation.

Suggested Citation

  • Negrín José L., 2005. "The Regulation of Payment Cards: The Mexican Experience," Review of Network Economics, De Gruyter, vol. 4(4), pages 1-23, December.
    • Handle: RePEc:bpj:rneart:v:4:y:2005:i:4:n:1
    DOI: 10.2202/1446-9022.1076
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    References listed on IDEAS

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    1. David S. Evans & Richard Schmalensee, 2005. "The economics of interchange fees and their regulation : an overview," Proceedings – Payments System Research Conferences, Federal Reserve Bank of Kansas City, issue May, pages 73-120.
    2. Gans Joshua S & King Stephen P., 2003. "Approaches to Regulating Interchange Fees in Payment Systems," Review of Network Economics, De Gruyter, vol. 2(2), pages 1-21, June.
    3. Hunt Robert M., 2003. "An Introduction to the Economics of Payment Card Networks," Review of Network Economics, De Gruyter, vol. 2(2), pages 1-17, June.
    4. Weiner Stuart E. & Wright Julian, 2005. "Interchange Fees in Various Countries: Developments and Determinants," Review of Network Economics, De Gruyter, vol. 4(4), pages 1-34, December.
    5. Alfred E. Kahn, 1988. "The Economics of Regulation: Principles and Institutions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262610523, April.
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    Cited by:

    1. Biliana Alexandrova‐Kabadjova, 2009. "Impact of interchange fees on a nonsaturated multi‐agent payment card market," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 16(1‐2), pages 33-48, January.
    2. Alexandrova-Kabadjova, Biliana & Negrín, José Luis, 2009. "What drives the network’s growth? An agent-based study of the payment card market," Working Paper Series 1143, European Central Bank.

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