Fascinating paper, based on the introduction.  its seems to be an excellent primer with clearly written background to the credit card industry, with explanations about the three components; issuers, acquirers, and networks.
It provides five scenarios for consideration:

1. Merchant Plaintiffs Prevail: No More Uniformity in Interchange Fees
2. Regulation of Interchange Fees
3. Nationalization of Credit Card Networks
4. Breakup of MasterCard/Visa
5. Reorganization of MasterCard/Visa

Conclusion:

We are not sufficiently clairvoyant to predict which of the multiple scenarios for
the card industry will come to pass. Our educated guess at this point is that if the interchange fee cases eventually go to trial and run the gamut through the appeals courts, the cooperative networks ultimately will prevail. They not only have economics of network externalities on their side, but a prior judicial ruling (Nabanco) that the courts would have to explicitly overturn. Plaintiffs have an uphill fight on their hands to reach this result.

…..

We do not believe, however, there is any convincing evidence that price
regulation benefits consumers. Nor is there a clear cut theoretical or empirical case that the way that the charge card has evolved has been detrimental to social welfare. What has been good for the card networks appears to be consistent with what is good for the societies in which they have so notably grown and flourished.

Relevance to Bankwatch:

The conclusion sounds flat, so not clear on the relevance yet.  Need more time to study, but thought I’d post it here … comments or analysis from the credit card experts welcome.

Brookings future of credit cards.pdf