Debunking the “Cross-Subsidy” Theory
In our earlier post, we observed that the GAO report on interchange got off on the wrong foot when it concluded that interchange fees were rising. We infer from the silence which greeted our post that everyone agrees with this criticism. Indeed, yesterday’s posts and comments appear to agree that the GAO’s report does very little to advance the discussion of interchange or the cost of electronic payment. But we suspect that greater disagreement lies just around the corner.