Updated on: 10 Jun 2016

On the 9th of June 2016 entered into force in the EU the new rules on transparency of the costs of payments with debit or credit cards. These rules will allow both consumers and retailers to make more informed choices about the credit cards and the payment solutions they will choose to use. Now all elements of the Interchange Fee Regulation are fully applicable.

The Regulation on Interchange Fees for Card-based Payment Transactions was adopted by the EU Council of Ministers and the European Parliament in 2015, on the basis of a Commission proposal of July 2013. It is aimed at addressing the problem of widely varying and excessive hidden inter-bank fees for card and card-based transactions which are an obstacle to the Single Market and a barrier to innovation.

When a customer pays for a purchase with a credit or debit card, the retailer's bank (the "acquiring bank") pays a fee to the bank that issued the payment card to the consumer (the "issuing bank"). A so-called "interchange fee" is then deducted from the final amount that the retailer receives from the acquiring bank for the transaction.

In order to address the problem of widely varying and excessive interchange fees, the EU adopted the Interchange Fees Regulation in 2015. The first set of rules, applicable since 9 December 2015 introduced caps on interchange fees for consumer debit and credit cards. The final set of rules applicable from 9th of June 2016 aims at allowing the payment card market to work more efficiently. Key changes include:

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