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Interchange Fee Regulation


Interchange Fees

Interchange fees are fees charged by a cardholder’s bank to a retailer’s bank every time a person makes a card-based purchase. On 29 April 2015, the European Parliament and the Council of the European Union adopted the Interchange Fee Regulation (EU) 2015/75 (IFR) on interchange fees for card-based payment transactions.

IFR caps interchange fees relating to consumer card-based payment transactions and aims, among others, at: (i) increasing transparency on fees thus permitting retailers to know the level of fees paid when accepting cards, and (ii) enhancing competition by providing cardholders with more and better choices between different types of payment cards and service providers. Interchange fees are capped at 0,2% and at 0,3% of the value of the transaction for consumer debit and credit cards respectively.

Payment card schemes and processing entities under the IFR

The European Banking Authority (EBA) issued, on 27 July 2016, Regulatory Technical Standards (RTSs) specifying the requirements which payment card schemes and processing entities must comply with, for ensuring the independence of their accounting, organisation, and decision-making processes.

On 9 July 2018, Cyprus law (Ν.77(Ι)/2018) on interchange fees for card-based payment transactions (only available in Greek) was published in the Official Gazette of the Republic of Cyprus. The Central Bank of Cyprus (CBC), the Commission for the Protection of Competition and the Consumer Protection Service of the Ministry of Energy, Commerce and Industry are the designated competent authorities for ensuring IFR and Cyprus law (N.77(I)/2018) implementation in Cyprus.