Card payments have utterly transformed the financial services landscape since their modest beginnings over 50 years ago. Over 36% of consumer payments in 2004 were made with electronic payment vehicles, the majority of those on some type of plastic card. In 2004, U.S. consumers charged $1.43 trillion in credit payments alone, a year when Americans held over 566 million credit cards and 290 million debit cards. In other words, card payments have become a fundamental part of Americans' lives, and revenue from card payments has become critical to financial institutions' bottom lines. As a consequence, however, card payments have become major expenses for merchants and these expenses are controversial today.

U.S. interchange has been modified over time to achieve a wide variety of desired outcomes:

• Reductions have promoted new technology at the point of sale.
• Increases have selectively targeted channels characterized by higher fraud and greater reliance on cards, such as mail order, telephone order, and Internet.
• Reductions have been used to penetrate supermarkets, quick service restaurants, and other lower profit margin categories.
• Increases have been used by card associations to compete for market share and to encourage certain issuer product development.