EU caps card payments interchange fees

The European Commission welcomed a regulation, which caps interchange fees for card payments, entering into force on Monday, and said the new rules will facilitate market entry of new players and benefit both retailers and consumers.

The commission said the Interchange Fee Regulation is intended to help create a single market for card payments across the EU.

The regulation introduces a general cap applying to both cross-border and domestic transactions of 0.2 percent for debit cards and 0.3 percent for credit cards of the value of the transaction.

Interchange fee was paid by the bank serving the retailer to the bank that issued the card to the customer, each time a consumer uses a credit, debit or prepaid card to buy something in a shop or online.

Interchange fees are always passed on to all consumers as the retailer generally incorporates the interchange fees in the price charged to consumers.

"Lower interchange fees will benefit merchants and consumers, particularly in Member States where current fees are high," the commission said.

Card payments are "particularly important" for cross-border and internet payments and so competitive card payments are "essential for the development of the internal market," the commission said. Endit