Out-Law News | 20 Apr 2015 | 3:49 pm | 1 min. read
Interchange fees are paid by the retailer's bank to the purchaser's bank, and are deducted from the amount the retailer makes on the sale.
These costs, which amount to "tens of billions of euros every year", are ultimately passed from retailers to consumers, the Council said in a statement. The fees have varied from one member state to another, the Council said.
For debit cards used cross-border, there will be a cap of 0.2% of the transaction value.
Domestically, the debit card cap is also 0.2%. During a five-year transition period, EU member states may cap fees at a set value – 0.2% of the "annual weighted transaction value of all domestic transactions within the scheme".
Countries may also set a maximum fee of 5 euro cents for smaller domestic transactions after the five year transition period, the Council said.
An immediate cap of 0.3% of transaction value will be placed on credit cards and member states can choose whether to lower this for domestic purchases.
'Universal card' payments that aren't clearly distinguishable as credit or debit cards will be charged as debit cards, but for the first year 30% of each transaction can be charged as for a credit card.
The new rules will encourage competition and make it easier for new entrants to join the market, the Council said. Transparent mechanisms will also let retailers know what level of fees will apply when they accept cards, it said.