On December 21, 2022, Visa and Mastercard announced that they would be extending the interchange fee caps in the European Economic Area (EEA) by seven years, until December 31, 2029.
Background
Interchange fees are fees that are charged by credit and debit card networks to merchants for each transaction. In the EEA, these fees are capped at 0.3% for credit card transactions and 0.2% for debit card transactions.
The caps were originally introduced in 2015 as part of a European Union directive aimed at reducing the cost of card payments for merchants.
Extension
The decision to extend the interchange fee caps was made after a review of the impact of the caps by the European Commission. The Commission found that the caps had been successful in reducing the cost of card payments for merchants, while not having a negative impact on innovation or competition in the payments market.
The extension of the caps will provide certainty for businesses and consumers in the EEA, and will help to ensure that the benefits of lower card payment costs continue to be felt for years to come.
Benefits of the Interchange Fee Caps
The interchange fee caps have a number of benefits for businesses and consumers in the EEA, including:
- Reduced costs for merchants: The caps have reduced the cost of card payments for merchants, which can lead to lower prices for consumers.
- Increased competition: The caps have increased competition in the payments market, which has led to more innovative and efficient payment solutions.
- Consumer protection: The caps have helped to protect consumers from excessive card payment charges.
Conclusion
The extension of the interchange fee caps in the EEA is a positive development for businesses and consumers. The caps will continue to provide certainty for businesses and consumers, and will help to ensure that the benefits of lower card payment costs continue to be felt for years to come.
Kind regards
N. Bauer
