Interchange fees explained
5 Minutes
Interchange fees for Consumer Card-Based Payments (IFR) center around a cap of Interchange fees for consumer cards across the EU.
Interchange fee regulations
There are two reasons behind the regulations:
- To simplify fee structures for card-based payments
- To take a step toward the creation of an EU payments market
In practical terms, these changes mean an EU Interchange cap as follows:
- 0.2% of the transaction value for Visa and Mastercard consumer debit cards
- 0.3% of the transaction value for Visa and Mastercard consumer credit cards
The revisions initially applied in the EU, but have since been rolled out in other markets such as Australia.
More visibility into transaction fees
As well as the Interchange cap, all acquirers now need to give information about the costs associated with each transaction. This includes:
- the transaction reference.
- the costs charged to you (including the split between the Interchange and service fees).
- the value of the transaction and the settlement currency in your account.
Acquirers must now bill using an Interchange++ pricing structure. This is a pricing model that tracks the Interchange rates.
So, when they go down, your costs go down and you get to see exactly what you're charged for every transaction.
No danger of hidden costs or additional surcharges. If you're an Adyen customer, this is nothing new; we've always billed this way.
In 2016, the second part of the IFR regulations came into effect. This included the following:
- Card schemes now permit multiple brands to be processed on the same card at the point of sale. So you and your customers have a choice of payment methods on a single card.
- The “Honor all cards rule” no longer applies. This means you don't have to accept both credit and debit cards for any given brand. You're free to choose to accept one but not the other.
- Card schemes have to define their transaction processing and scheme management activities.
We worry about the Interchange fee cap regulations so you don’t have to
You have better things to do with your time than track the latest Interchange cap. So we do it for you.
We’ll keep you informed about any changes that will affect you. Our dedicated team monitors rates and regulations to ensure you get the best deal.
Plus, our global acquiring in key markets around the world give you access to lower domestic rates.
Transparency is central to everything we do at Adyen. Any savings we make for you, are passed on at no extra cost.
We hope this has been helpful and cleared up any questions or confusion about the Interchange fees cap.