Winning the Interchange Wars by Opening the Network

This Financial Insights report explores how card issuers can use recent technological advances in card network architectures and capacity to create new revenue streams that will offset reductions in interchange and turn merchants from legal adversaries into partners. These advances make it possible to transmit many different types of data along with and instead of the traditional authorization/approval exchange.

"As we have said before, card issuers need to reduce their dependence on interchange revenue, which is under legal and regulatory pressure in many parts of the world. The increased power of the card networks to provide new value-added services to merchants can accomplish this purpose while simultaneously improving the chances of a favorable outcome in the interchange wars." ? Aaron McPherson, research director, Payments, at Financial Insights