12 Stan. J.L. Bus. & Fin. 425 (2006-2007)
Payment Wars: The Merchant-Bank Struggle for Control of Payment Systems

handle is hein.journals/stabf12 and id is 429 raw text is: Payment Wars: The Merchant-Bank
Struggle for Control of Payment Systems
Adam J. Levitin*
In recent years, the cost to merchants of accepting credit cards has risen
dramatically without a corresponding increase in the benefits. This trend has
sparked a wide-ranging struggle between merchants and banks, as merchants
have begun to see methods for limiting payment costs. The conflict is
playing itself out in business practices, banking regulation, IPOs, corporate
governance, corporate restructuring, bank mergers, and the largest private
antitrust litigation in U.S. history.
This article reviews the factors behind the struggle between merchants and
banks and the strategies adopted by each, and uses the framework of the
merchant-bank struggle to reevaluate the relationship between banking and
commerce. The article argues that the extraordinary transactional and
litigation energy being spent in this fight is likely for naught. Ultimately, the
growth of national bank brands, technological developments, and innovative
business models are likely to independently result in a radical reshaping of
the payments world that will not only ease merchant-bank tensions, but also
blur the distinction between banking and commerce.
I.      The Struggle Between Merchants and Banks for Control of Payment
Systems
Merchants and banks are currently engaged in a wide-ranging struggle for
control over the costs of payment systems. The conflict is playing itself out in
business   practices,  banking   regulation,  corporate   governance,   corporate
restructuring, securities offerings, bank mergers, and the largest private antitrust
litigation in history. Yet, it is possible that the extraordinary energy being spent in
this fight is for naught; the growth of national bank brands, technological
developments, and innovative business models are likely to independently reshape
the payments world and the general relationship between banking and commerce.
* Associate Professor, Georgetown University Law Center (starting summer 2007).
Associate, Business Finance & Restructuring Department, Weil, Gotshal & Manges, LLP. J.D.,
Harvard Law School; M.Phil., Columbia University; A.M., Columbia University; A.B.,
Harvard College. The author is grateful for the comments and encouragement of Michael
Gadarian, John Januszczak, Sarah Levitin, Ronald Mann, Joel Van Ardsdale, Elizabeth
Warren, and Jared Wessel. The views expressed in this article are solely those of the author.
Please send comments to Levitin@post.harvard.edu.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing nearly 2,700 academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline with pricing starting as low as $29.95

Access to this content requires a subscription. Please visit the following page to request a quote or trial:

Already a HeinOnline Subscriber?