On 19 May 2015, the Regulation on Interchange Fees for Card-Based Payment Transactions (the Regulation) was published in the Official Journal of the European Union (Regulation (EU) 2015/751). The Regulation applies caps on the interchange fees charged by cardholders’ banks to merchants’ banks every time a consumer makes a card based purchase. The Regulation will enter into force on 8 June 2015.

This follows the European Parliament’s approval of the text of the Regulation at first reading on 10 March 2015 and the Council of the European Union’s adoption of the Regulation on 20 April 2015.

Background

This Regulation was first proposed by the Commission in July 2013. In December 2014, the European Commission and the European Parliament agreed the key terms of the Regulation. Our briefings of 18 December 2014 and 22 April 2015 set out the key provisions and stages of implementation of the Regulation.

The full text of the published Regulation can be accessed here.

Entry into force

The Regulation will enter into force as set out in the timeline below:

8 June 2015

  • Ban on “steering rules” comes into force (Article 11)

9 December 2015

  • The new interchange fee caps come into force (Article 3 & 4)
    • Debit card transactions – Domestic: 0.2% of the value of the transaction or a per transaction fee of no more than €0.05 with a 0.2% cap and International 0.2% of the value of the transaction
    • Credit card transactions – Domestic: 0.3% of the value of the transaction but Member States may define a lower cap and International: 0.3% of the value of the transaction
    • “Universal”* card transactions – 0.2% of the value of the transaction or a per transaction fee of no more than €0.05 with a 0.2% cap and 0.3% of the value of the transaction for those transactions treated as credit card transactions
  • Territorial restrictions within the EU are prohibited (Article 6)
  • Payee’s payment service provider (PSP) must provide the payee with a breakdown of the charges for a card transaction including the interchange fee and the merchant services charge (MSC) (Article 12)

9 June 2016

  • Payment card schemes and processors must be independent, and cannot present bundled prices for both services (Article 7)
  • Any rules hindering the co-badging of two or more payment brands or applications are prohibited (Article 8)
  • The acquiring PSPs must offer and charge MSCs to the payees on an “unblended” basis (Article 9)
  • “Honour all cards” rule is abolished (Article 10)

9 December 2016

  • Member States may no longer define a share of no more than 30% of the domestic payment transactions for “universal” cards to be treated as credit card transactions (Article 16)

9 December 2018

  • Three party payment card schemes† are no longer exempted from the Regulation (Article 1)

9 December 2020

  • Member States are no longer allowed to permit PSPs to apply a weighted average interchange fee (Article 3)