FAQ: The Cross Border Domestic Interchange Program

In January 2015, the EU will introduce a cap on card Interchange fees for Visa cross border acquiring on domestic transactions.

This cap is known as the Cross Border Domestic Interchange Program, or CBDIP. Below are some key points to cover all the questions you may have regarding CBDIP, and give some insights as to whether your business should register. 

What is the benefit?

For some merchants, the new rates will translate into significant cost savings on the interchange rate in Europe. However, this needs to be judged on a case-by-case basis due to a number of requirements attached to applying the rates, and the concurrent reduction of domestic interchange rates in some markets.

What are the CBDIP rates?

The new rates are 0.20% for immediate debit (i.e., debit cards), and 0.30% for deferred debit (i.e., credit cards).

What are the requirements for merchants to claim the CBDIP rate?

There are four requirements:

  • The payment service provider must be operating on an Interchange++ pricing structure. (Adyen already operates on this pricing structure.)
  • Transactions need to be identified in processing by a Single Merchant Identifier (SMI).
  • Merchants need to register for the program.

Will all merchants be able to save money with the CBDIP rate?
No. We advise that the CBDIP rate is most interesting to merchants that meet two or more of the following criteria:

  • Have an entity in a market with a high MSC (Merchant Service Commission) and with large volume.
  • Process a significant volume of transactions in store.
  • Process a large volume of 3D Secure transactions online.

For a more in depth analysis, contract your account manager or see this post: EU Interchange Fees Cap

How do we register for an SMI?

Merchants need to register with Visa Europe, through their acquirer (such as Adyen) for an SMI. The registration process takes about sixty days.

When does the program start?

Merchants can claim the rates as of January 1, 2015, but only if they register between October 21 and November 14 2014.

What if we register after November 14?

Merchants are still able to register after this date, however bear in mind that you will not be able to claim the rates as of January 1. In this situation, the normal timeline of approximately sixty days (as indicated by Visa) will apply.

We are an Adyen client based in the Netherlands. Can we sign up to the program?

No. This program is only open to non Netherlands-based clients within the scope of Adyen’s European Visa licenses, which include UK, ES, DE, SE, plus a number of other markets.

Which traffic is eligible for this program?

Only domestic traffic in markets in which the merchant has a legal entity are eligible for this program.

We are already working with the Adyen payment platform. Do we need a new contract to register for this program?

No. Adyen already operates on an Interchange+ pricing structure. However, an addendum will be added to your contract for administration costs.

Do we need to make any other changes from our end?

There are no changes required from the merchant side. Adyen will attach the SMI to transactions from our side.

How do we get started?

Get in touch with your account manager to register!


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