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ARTICLE · 09 AUGUST 2017

Interchange Fees - Returns Or Recoveries?

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Interchange fees are paid by merchant acquirers to card issuers as a percentage of each and every credit and debit card transaction.

United KingdomConsumer Protection
Deborah Sheldon
Deborah Sheldon

Interchange fees are paid by merchant acquirers to card issuers as a percentage of each and every credit and debit card transaction. Acquirers pass these costs onto their merchants which may result in higher prices for consumers. Analysts have struggled to quantify these fees but estimate that they may come to some £2 billion per year in the UK alone.

The level of interchange fees varies according to products, their means of purchase and the jurisdictions involved. However, there are mechanisms in place to cap these fees. For example the EU's Interchange Fee Regulation (Regulation (EU) 2015/751) caps fees at 0.2% and 0.3% for most debit and credit card transactions respectively, within the European Economic Area.

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