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Interchange fees were once a minor issue in the background of the payment card market. Recently, however, they have made headlines in Latin America as they have attracted the attention of policy makers, concerned about their effects on countries’ economic development and growth. Merchant associations say that interchange fees unduly burden vendors, and undermine their competitiveness, while generating unwarranted profits for banks and payment processors. Proponents of change now have the ear of left-leaning governments throughout the region, and regulation of interchange fees is under consideration in some countries.

For their part, banks and other system operators argue that government intervention would upset the balance of the market and impede development of electronic payment systems, which stimulate economic growth. The dynamics of electronic payment systems will be profoundly affected by the outcome of this debate.