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EU Parliament approves interchange fee caps

The European Parliament has voted in favour of a bill to cap credit and debit card interchange fees.

European Union

EU Parliament approves caps on debit and credit card interchange fees

The bill, which will come into force in October this year, will cap interchange fees at 0.2% of the transaction value for consumer debit cards and at 0.3% for consumer credit cards.

Member states will also have the flexibility to define lower percentage caps and impose maximum fee amounts on consumer debit cards. The bill also addresses licensing issues and other conditions.

The new rules will not apply to three-party schemes such as Diners and American Express, provided the card is both issued and processed within the same scheme. Commercial cards used only to pay business expenses will also be exempt. After three years, the rules will also apply to three-party card schemes that licence other parties to issue cards and thus circumvent the law by effectively operating as four-party ones.

Commissioner Margrethe Vestager, in charge of competition policy, said: “This legislation will put a cap on interchange fees, make them more transparent and remove a hurdle to rolling out innovative payment technologies. It is good for consumers, good for business and good for innovation and growth in Europe. As cards are the most widely used means of online payment, this Regulation is also an important building block to complete the European Digital Single Market.”

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