In Favor of Ad Valorem Debit Interchange

Bucking the current trend of professing Ad Valorem Debit Interchange the root of all payments evil, The Kansas City Fed has released a new paper that concludes that Ad Valorem Debit Interchange increases consumer surplus (economic value) and Social Welfare (combined economics for the aggregate system). Possibly the most telling part of the paper shows how current global legislative initiatives have attacked the structure (Ad Valorem) instead of the market dynamics or rules – and how that has not “fixed” much. It is so intriguing, we wrote a response about it. Let us know what you think.

Benton Consulting Article: Death Before Ad Valorem
Federal Reserve Bank of Kansas City: Regulating Debit Cards: The Case of Ad Valorem Fees