Abstract
Górka investigates the Polish interchange fee reform. Poland was the country with the highest average interchange fee rates in Europe. After explaining the history of interchange fee reductions in Poland, the chapter continues with demonstrating the results of merchant surveys that draw a clear picture of the process of passing through interchange fee reductions from acquirers to merchants. The impact of interchange fee reductions on card acceptance and card usage is verified. A close look is taken at bank interchange fee revenues, fee-based income and card- and accountholder fees. Górka provides a unique study of Visa and Mastercard scheme fees and their strategy. He shows implications of the interchange fee reductions for competition, innovation and security on the Polish payment market.
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Notes
- 1.
Merchant surveys were conducted as part of the research project of the Foundation For Development of Cashless Payments (FROB) and the Faculty of Management, University of Warsaw (WZ UW/FoM UW). The book’s author was the principal investigator in the research project and its author. The project was funded by the FROB Foundation. Surveys based on the questionnaire prepared by the author were carried out by Ipsos market research institute using the CAPI technique (Computer Assisted Personal Interviews). Ipsos interviewed companies’ employees responsible for the C2B (Consumer-to-Business) payments acceptance and having the knowledge about company finances. The study aimed, inter alia, at identifying: changes in the area of card acceptance and prospects of mobile payments and innovative forms of payments. This book shows only selected figures and tables from the survey covering the first aspect, with emphasis on the pass-through effect of the interchange fee decreases from acquirers to merchants in Poland. Ipsos prepared, under the author’s supervision, two extensive reports (January 2014 and March 2015) in which all survey results are presented.
- 2.
This algorithm is used in the R package in the auto.arima() function. “It combines unit root tests, minimisation of the AIC and MLE to obtain an ARIMA model. After determining the order of integration (the number of differences d) by using repeated KPSS tests, the algorithm employs a stepwise search to traverse the model space to select the best model with the smallest AICc” (“ARIMA modeling in R” https://www.otexts.org/fpp/8/7, 10 August 2018).
- 3.
In order to remain methodologically correct, in all four cases it was computed as a ratio to the theoretical value predicted by each model, not to the historical value.
- 4.
The NBP data on fees and commissions in the Polish banking sector were refined by removing minor inconsistencies and by filling missing data. In order to keep an exact comparability in the sample, i.e. have the same products over the entire period, 19 banks were included for calculations in the final set of data.
- 5.
However, in the next years, payment organisations in cooperation with selected issuing banks initiated new reward programmes in Poland. Visa Offers was introduced in 2015 and Mastercard Priceless Specials in 2016. The latter substituted Mastercard Rewards and was extended to include all Mastercard and Maestro cards. Visa Offers rewards cardholders for their Visa card payments with rebates on a range of products at Visa partners in the programme. Mastercard Priceless Specials rewards cardholders with points that can be exchanged for different products at Mastercard partners in the programme.
- 6.
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Górka, J. (2018). Empirical Investigation of the Polish Interchange Fee Reform Effects. In: Interchange Fee Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-03041-4_3
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DOI: https://doi.org/10.1007/978-3-030-03041-4_3
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