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The cap would apply to both cross-border and domestic card-based payments and should result in lower costs for consumers.
Interchange fees for card-based payments, paid by the merchant's bank to the bank that issued the card, are not transparent and they differ between EU countries, where they are subject in some cases to legislation and in others to decisions by national competition authorities.
These fees are charged by banks belonging to card schemes such as Visa and MasterCard (so-called four-party schemes, involving an issuing bank, a merchant’s bank, the retailer and the card user) which together control the lion’s share of the market. Retailers are charged for every card transaction and add the costs to the prices of the goods or services they offer.
Fees capped
For cross-border debit card transactions the agreed cap is 0.2% of the transaction value. For domestic transactions, member states can apply the cap of 0.2%to the annual weighted average transaction value of all domestic transactions within the card scheme.
Parliament's negotiators made sure that the system of applying the cap on a weighted average basis will apply for five years only. Thereafter, interchange fees for domestic transactions will be subject to a simpler, more transparent regime where the cap for a domestic transaction is 0.2% of the transaction value, or set at a fixed fee of at most five cents per transaction.
For credit card transactions, the parties agreed to cap the fee at 0.3% of the transaction value.
These caps will take effect six months after the legislation enter into force.