The No Surcharge Rule and Merchant Competition

Frans Saxén

Research output: Contribution to journalArticleScientificpeer-review

2 Citations (Scopus)


We analyze the no surcharge rule (NSR) and its impact on merchant com- petition by comparing different surcharging regimes. Any constraint on surcharging, including the NSR is shown to be a competition-softening device. A NSR may induce socially excessive card use. Allowing imperfectly competitive merchants to surcharge may lead to socially too little card use. Under a NSR, increased cost of card accep- tance increases all prices, even the prices of a merchant not accepting cards. Under the NSR cards yielding no social surplus may be viable. This is not the case without the NSR. Card-use rewards may hurt consumers.
Original languageEnglish
Peer-reviewed scientific journalJournal of Industry, Competition and Trade
Issue number1
Pages (from-to)39-66
Number of pages28
Publication statusPublished - 2014
MoE publication typeA1 Journal article - refereed


  • 511 Economics
  • No surcharge rule
  • Retail financial services
  • Payment card networks
  • Debit cards
  • Surcharging
  • Credit cards
  • KOTA2013


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