This chapter presents how card markets work. It lays out the puzzles encountered by the architects of credit card markets and explains why they pose challenges to standard understandings of market economics. In line with the argument that credit cards combine the features of two products, payment cards and consumer loans, here the focus is on two payment puzzles: two-sided markets and standardization. It is argued that these puzzles are such that they cannot be effectively solved by a self-regulating competitive market driven by the forces of supply and demand in the pursuit of ever-increasing profits. Instead, the solutions to these puzzles require some sort of nonmarket intervention. The chapter concludes with a short account of how each of the two puzzles was solved in the American payment card market, as well as gives a brief preview of solutions used in the postcommunist countries.
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