( also from the standpoint of the “ war on cash ” ) remains crucial. the mif, preset for each circuit, is relevant both to interbank and to bank - customer transactions as a component of the final price. according to the european competition authority, the mif constitutes a de facto lower limit to the service fees charged to merchants on debit, credit and prepaid card transactions. however, the theoretical literature is not at all unanimous on the effects of multilateral interchange fees, and empirical studies are of little help. this suggests the need for a prudent approach, with case - by - case evaluation before any decision for substantial intervention on payment network mechanisms is made. this is the necessity that has shaped the commission ’ s recent initiatives to find a practical method for setting the interchange fee at an efficient level that truly takes account of the costs ( and the benefits ) of accepting a card in lieu of other instruments ( especially cash ) at points of sale – the so - called “ tourist test ”. the aim is twofold : to help guide the european competition authority in assessing compliance of cross - border mifs with the eu treaty and to stimulate convergence of fees for sepa card use by applying the new method to national circuits. the eurosystem too has undertaken a study on the costs of using various payment instruments and cash, in order to measure the potential savings to the economy of replacing the more costly instruments with those considered more efficient. the survey will permit comparisons between countries and instruments ( for instance, calculating threshold levels that make it economic to choose any given instrument ) and to highlight the effects of technological innovation. the debate on the mif and, more in general, on the fee structure of payment networks must not obscure the objective of expanding electronic payments and reducing the use of cash in retail payments. the mif covers a significant part of the costs sustained by the issuer ( brand management, technological innovation, clearing, authorizations, revocations ) and can therefore serve to avoid levying a charge directly on the cardholder. indeed, in order to encourage the use of cards, the mif structure posits that the holder is to be exempt from charges upon making purchases ; this argument is completed on the normative plane with the psd ’ s surcharge rule, also incorporated into the italian government ’ s draft legislative decree. although it goes beyond the debate on the mif, another important explicit recommendation of the eurosystem and the european competition

consumers have come to expect in other areas of the commercial internet. conclusion the combination of technologies that put vast computing power, rich data sets, and artificial intelligence onto simple smartphone apps together with important research into consumer financial behaviors has great potential to help consumers navigate their complex financial lives more effectively, but there are also important risks. i am hopeful that fintech developers, data aggregators, bank partners, consumers, and regulators will work together to keep consumers in the driver ’ s seat as we move forward with these new technologies. if we work together effectively toward this goal, the fintech stack may be able to offer enormous benefits to the consumers they aim to serve, while appropriately identifying and managing the risks. 1 i am grateful to kelvin chen for his assistance in preparing this text. the remarks represent my own views, which do not necessarily represent those of the federal reserve board or the federal open market committee. 2 see lael brainard, “ the opportunities and challenges of fintech ( pdf ), ” ( speech at the conference on financial innovation, washington, d. c., december 2, 2016 ). 3 see, e. g., damaris olaechea, “ who issued the first credit card? ” nerd wallet ( february 12, 2014 ), www. nerdwallet. com / blog / credit - cards / issued - first - credit - card /. 4 see, e. g., consumer financial protection bureau, the consumer credit card market ( pdf ), executive summary december 2015, and federal reserve bank of new york, 2017, www. newyorkfed. org / medialibrary / interactives / householdcredit / data / pdf / hhdc _ 2017q2. pdf. august 5 see j. d. power, “ attractive rewards and benefits drive credit card selection, satisfaction and spend, ” press release, august 20, www. jdpower. com / sites / default / files / 2015137 _ u. s. _ credit _ card _ study _ pr _ final. pdf. 2015, 6 see, e. g., jeanine skowronski, “ why 5 percent cash back is an overrated selling point, " american banker, november 6, 2013, www. americanbanker. com / opinion / why - 5 - cash - back - is - an - overrated - selling - point. consumer financial protection bureau, the consumer credit card market ( pdf ), section 7