Interbank Fees And Mastercard: 0.3% Is The Magic Number

0.3% seems to be the magic number for setting caps on interchange fees since it reappears not only in current and closed competition proceedings at the EU and national levels, but also in the upcoming Interchange Fees Regulation. MasterCard has promised the Authority for Consumers & Markets that it will reduce its domestic interchange fees from 0.9% to 0.3% in the coming two years. Reduced caps means good news for retailers, as interchange fees represent 60% of their costs for card-based payment transactions. Retail customers are likely to benefit too since lower costs normally result in lower prices.

Interchange fees are the tariffs charged by the cardholders' banks to the retailers' banks for processing credit card payments. These fees are set by the banks without competitive pressure by retailers and consumers having any impact on the fee level. This was why the European Commission prohibited MasterCard's cross-border EEA interchange fees in 2007. MasterCard