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We analyze the effects of a hypothetical payment card fee regulation on bank profits, consumer welfare, and merchant welfare. We model consumers’ and merchants’ bank choices for debit card services, cardholders’ demand for card usage (conditional on bank choice), and how banks account for these in setting card fees to their customers. To estimate the model, we use bank-level data and survey data from the Norwegian debit card scheme, BankAxept. We conduct counterfactual exercises to analyze the effects of interchange fee regulations in the debit card scheme.