Interchange Fee Regulation
Also known as: IFR, Regulation (EU) 2015/751
The Interchange Fee Regulation is Regulation (EU) 2015/751. It caps interchange fees at 0.2% for consumer debit cards and 0.3% for consumer credit cards, on card payments where both the payer's and the payee's payment service provider are in the EU or EEA.
Last reviewed
Example
A €100 payment on an EU consumer debit card can carry at most €0.20 of interchange between the merchant's acquirer and the cardholder's issuer.
Every card payment carries a fee between the merchant's bank and the cardholder's bank. The Interchange Fee Regulation put a ceiling on it.
The caps
Regulation (EU) 2015/751 sets two caps, each on the interchange fee, per transaction:
- Consumer debit cards: 0.2% of the value of the transaction (Article 3).
- Consumer credit cards: 0.3% of the value of the transaction (Article 4).
The text says payment service providers "shall not offer or request" a fee above the cap. For domestic debit card transactions, Article 3(2) lets a member state set a lower percentage cap, with an optional fixed maximum amount, or allow a per-transaction fee of no more than €0.05. That flat fee may be combined with a percentage only if the card scheme's total interchange stays within 0.2% of its annual domestic debit transaction value.
Who it covers
The Regulation applies to card-based payment transactions carried out within the Union, where both the payer's payment service provider and the payee's payment service provider are located there. Since 1 January 2020 the EEA Agreement extends it to Iceland, Liechtenstein and Norway. In plain terms: a card from an issuer in that area, used at a merchant served by an acquirer in that area.
Cross-border payments with a card issued outside the EU and EEA are not covered by the caps. The caps do not apply to commercial cards issued to businesses, to cards from three-party schemes, or to cash withdrawals at ATMs or at the counter of a payment service provider (Article 1(3)). On a business card, interchange is not capped by this Regulation. A three-party scheme that licenses other providers to issue or acquire, or that issues cards through an agent or co-brand partner, is treated as a four-party scheme (Article 1(5)).
What it caps, and what it does not
It caps interchange, the fee the acquirer pays the issuer. It does not cap what the merchant pays. That price is set by the acquirer or payment provider and is made of interchange, scheme fees and a margin.
Interchange is the floor under the merchant's price. The cap only limits how high that floor can go. A merchant on a flat rate pays interchange plus everything else.
