Credit and Debit Card Interchange Fees in the United States August ...

Credit and Debit Card Interchange Fees in the United States August 2013 Update

Payments System Research Department † Federal Reserve Bank of Kansas City

† Fumiko Hayashi, Senior Economist, and Emily Cuddy, Research Associate, compiled this update. Data sources are: American Banker (various issues); ATM & Debit News (various issues); Credit Card Management (April 1999); Debit Card Directory (various years); EFT Data Book (various years); Pacificisland.publishpath.com; Vantagecard.com; Monerisusa.com; MasterCard Worldwide; and Visa Inc. The original charts appeared in Fumiko Hayashi, Richard J. Sullivan, and Stuart E. Weiner. 2003. A Guide to the ATM and Debit Card Industry, Federal Reserve Bank of Kansas City; Fumiko Hayashi, 2006. “A Puzzle of Card Payment Pricing: Why Are Merchants Still Accepting Card Payments?” Review of Network Economic, 5(1): 144-174; Fumiko Hayashi, Richard J. Sullivan, and Stuart E. Weiner, 2006. A Guide to the ATM and Debit Card Industry: 2006 Update, Federal Reserve Bank of Kansas City; and Fumiko Hayashi, 2009. “Do U.S. Consumers Really Benefit from Payment Card Rewards?” Federal Reserve Bank of Kansas City Economic Review, First Quarter: 37-63.

I. Consumer credit card interchange fees

120

$40 transaction at small supermarkets

100

Cents

80 60 40 20 0

120

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa Credit

Visa Traditional

Visa Signature Preferred

MC Credit

MC Core

MC World Elite

Discover Core

Discover Premium Plus

$40 transaction at largest supermarkets

100

Cents

80 60 40 20 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa Credit

Visa Traditional

Visa Signature Preferred

MC Credit

MC Core

MC World Elite

Discover Core

Discover Premium Plus

120

$40 transaction at small retailers

100

Cents

80 60 40 20 0

120

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa Credit

Visa Traditional

Visa Signature Preferred

MC Credit

MC Core

MC World Elite

Discover Core

Discover Premium Plus

$40 transaction at largest retailers

100

Cents

80 60 40 20 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa Credit

Visa Traditional

Visa Signature Preferred

MC Credit

MC Core

MC World Elite

Discover Core

Discover Premium Plus

$40 transaction at gas stations 120 100

Cents

80 60 40 20 0

35

2004

2005

2006

2007

2008

2009

2010

2011 (Oct)

Visa Credit

Visa Traditional

Visa Signature Preferred

MC World Elite

Discover Core

Discover Premium Plus

2012

2013

MC Core

$10 transaction at quick-service restaurants

30

Cents

25 20 15 10 5 0

2004

2005

2006

2007

2008

2009

2010

2011 (Oct)

2012

2013

Visa Credit

Visa Traditional

Visa Signature Preferred

MC Credit

MC Core*

MC World Elite*

Discover Core

Discover Premium Plus

Note: * indicates products with tiered interchange fees. The base rates are shown.

II. Consumer signature debit card interchange fees

$40 transaction at small supermarkets 50 45 40 35 Cents

30 25 20 15 10 5 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa

Visa Prepaid

MasterCard

Discover

Regulated IF

$40 transaction at largest supermarkets 50 45 40 35 Cents

30 25 20 15 10 5 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa

Visa Prepaid

MasterCard

Note: Exempt interchange fees are shown from October 2011 to 2013.

Discover

Regulated IF

$40 transaction at small retailers 70 60

Cents

50 40 30 20 10 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa

Visa Prepaid

MasterCard

Discover

Regulated IF

$40 transaction at largest retailers 70 60

Cents

50 40 30 20 10 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa

Visa Prepaid

MasterCard

Note: Exempt interchange fees are shown from October 2011 to 2013.

Discover

Regulated IF

$40 transaction at gas stations 70 60

Cents

50 40 30 20 10 0

2004

2005 Visa

2006

2007

Visa Prepaid

2008

2009

MasterCard*

2010 Discover

2011 (Oct)

2012

2013

Regulated IF

$10 transaction at quick-service restaurants 22 21

Cents

20 19 18 17 16

2004

2005

Visa

2006

2007

Visa Prepaid

2008

MasterCard

2009

2010

Discover

Notes: Exempt interchange fees are shown from October 2011 to 2013. * indicates products with tiered interchange fees. The base rates are shown.

2011 (Oct)

2012

Regulated IF

2013

III. Consumer PIN debit card interchange fees 40

$40 transaction at small supermarkets

35 30 25 Cents

20 15 10 5 0 -5 -10

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Star Pulse Networks CU24

40

Interlink Accel/Exchange AFFN Regulated IF

Interlink Prepaid Shazam Maestro

NYCE Jeanie Alaska option

$40 transaction at largest supermarkets

35 30 25 Cents

20 15 10 5 0 -5 -10

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Star Interlink Interlink Prepaid NYCE Pulse Accel/Exchange Shazam Jeanie Networks AFFN Maestro Alaska option CU24 Regulated IF

Note: Exempt interchange fees are shown from October 2011 to 2013.

70

$40 transaction at small retailers

60 50

Cents

40 30 20 10 0 -10

70

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Star Interlink Interlink Prepaid NYCE Pulse Accel/Exchange Shazam Jeanie Networks AFFN Maestro Alaska option CU24 Regulated IF

$40 transaction at largest retailers

60 50

Cents

40 30 20 10 0 -10

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Star Interlink Interlink Prepaid NYCE Pulse Accel/Exchange Shazam Jeanie Networks AFFN Maestro Alaska option CU24 Regulated IF

Note: Exempt interchange fees are shown from October 2011 to 2013.

70

$40 transaction at gas stations

60

Cents

50 40 30 20 10 0

2004

2005

2006

Star* Pulse* Networks CU24*

35

2007

2008

Interlink Accel/Exchange* AFFN Regulated IF

2009

2010

Interlink Prepaid Shazam* Maestro*

2011 (Oct)

2012

2013

NYCE* Jeanie Alaska option

$10 transaction at quick-service restaurants

30

Cents

25 20 15 10 5 0

2004

2005 Star Pulse Networks CU24

2006

2007

2008

Interlink Accel/Exchange AFFN Regulated IF

2009

2010

Interlink Prepaid Shazam* Maestro*

Notes: Exempt interchange fees are shown from October 2011 to 2013. * indicates products with tiered interchange fees. The base rates are shown.

2011 (Oct)

2012

NYCE Jeanie Alaska option

2013

IV. Consumer signature versus PIN debit interchange fees

$40 transaction at small supermarkets 50 45 40 35 Cents

30 25 20 15 10 5 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa Signature Debit

MC Signature Debit

Star

Interlink

NYCE

Pulse

Maestro

Regulated IF

$40 transaction at largest supermarkets 50 45 40 35 Cents

30 25 20 15 10 5 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa Signature Debit

MC Signature Debit

Star

Interlink

NYCE

Pulse

Maestro

Regulated IF

Note: Exempt interchange fees are shown from October 2011 to 2013.

$40 transaction at small retailers 70 60

Cents

50 40 30 20 10 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa Signature Debit

MC Signature Debit

Star

Interlink

NYCE

Pulse

Maestro

Regulated IF

$40 transaction at largest retailers 70 60

Cents

50 40 30 20 10 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa Signature Debit

MC Signature Debit

Star

Interlink

NYCE

Pulse

Maestro

Regulated IF

Note: Exempt interchange fees are shown from October 2011 to 2013.

$40 transaction at gas station 50 45 40 35 Cents

30 25 20 15 10 5 0

2004

2005

2006

2007

2008

2009

2010

2011 (Oct)

2012

Visa Signature Debit

MC Signature Debit*

Star*

Interlink

NYCE*

Pulse*

Maestro*

Regulated IF

2013

$10 transaction at quick-service restaurant

35 30

Cents

25 20 15 10 5 0

2004

2005

2006

2007

2008

2009

2010

2011 (Oct)

2012

Visa Signature Debit

MC Signature

Star

Interlink

NYCE

Pulse

Maestro*

Regulated IF

Notes: Exempt interchange fees are shown from October 2011 to 2013. * indicates products with tiered interchange fees. The base rates are shown.

2013

V. Visa, MasterCard, and Discover consumer card interchange fees

$40 Visa transaction at small retailers 120 100

Cents

80 60 40 20 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa Credit

Visa Traditional

Visa Traditional Reward

Visa Signature (c)

Visa Signature Preferred (c)

Visa Signature Debit

Interlink

Visa Prepaid

$40 Visa transaction at largest retailers 120 100

Cents

80 60 40 20 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa Credit

Visa Traditional

Visa Traditional Reward

Visa Signature (c)

Visa Signature Preferred (c)

Visa Signature Debit

Interlink

Visa Prepaid

Note: (c) indicates credit card.

$40 MasterCard transaction at small retailers 120 100

Cents

80 60 40 20 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) MC Credit MC Core MC Enhanced MC World MC World High Value MC World Elite MasterCard Signature Debit Maestro

$40 MasterCard transaction at largest retailers 120 100

Cents

80 60 40 20 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) MC Credit MC Core MC Enhanced MC World MC World High Value MC World Elite MasterCard Signature Debit Maestro

$40 Discover transaction at small and largest retailers 120 100

Cents

80 60 40 20 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Discover Core

Discover Rewards

Discover Premium

Discover Premium Plus

Discover Signature Debit

Pulse

VI. Commercial credit card interchange fees

$200 transaction at retailers $6.00 $5.50 $5.00 $4.50 $4.00 $3.50 $3.00

2006

2007

2008

2009

2010

2011

2012

Visa Purchasing

Visa Business

Visa Signature Business

MC Purchasing

MC Business

MC Business World Elite

2013

Discover

$200 B2B Level II transaction $32.00 $30.00 $28.00 $26.00 $24.00 $22.00 $20.00

2006

2007

2008

2009

2010

2011

2012

Visa Purchasing

Visa Business

Visa Signature Business

MC Purchasing

MC Business

MC Business World Elite

Discover

2013

$200 B2B Level III transaction $32.00 $30.00 $28.00 $26.00 $24.00 $22.00 $20.00

2006

2007

2008

2009

2010

2011

2012

Visa Purchasing

Visa Business

Visa Signature Business

MC Purchasing

MC Business

MC Business World Elite

2013

Discover

$7,500 B2B transaction $160.00 $150.00 $140.00 $130.00 $120.00 $110.00 $100.00 $90.00 $80.00

2006

2007

2008

2009

2010

2011

2012

Visa Purchasing

Visa Business

Visa Signature Business

MC Purchasing

MC Business

MC Business World Elite

Discover

2013

VII. Consumer versus commercial credit card interchange fees

$100 Visa transaction at small retailers 300 250

Cents

200 150 100 50 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa Credit (c)

Visa Traditional (c)

Visa Signature Preferred (c)

Visa Purchasing

Visa Business

Visa Signature Business

$100 Visa transaction at largest retailers 300 250

Cents

200 150 100 50 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) Visa Credit (c)

Visa Traditional (c)

Visa Signature Preferred (c)

Visa Purchasing

Visa Business

Visa Signature Business

Note: (c) indicates credit card.

$100 MasterCard transaction at small retailers 300 250

Cents

200 150 100 50 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) MC Credit (c)

MC Core (c)

MC World Elite (c)

MC Purchasing

MC Business

MC Business World Elite

$100 MasterCard transaction at largest retailers 300 250

Cents

200 150 100 50 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct) MC Credit (c)

MC Core (c)

MC World Elite (c)

MC Purchasing

MC Business

MC Business World Elite

Note: (c) indicates credit card.

$100 Discover transaction at small and largest retailers 300 250

Cents

200 150 100 50 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Oct)

Discover Core (c)

Note: (c) indicates credit card.

Discover Premium (c)

Discover Premium Plus (c)

Discover Business