Interchange Fees Europe

Interchange Fees Europe

The interchange fee is the amount that an acquiring bank (the bank that negotiates with merchants to accept MasterCard® or Maestro® cards) pays to the issuing bank (the one that offers MasterCard® or Maestro® cards to consumers) for purchase transactions conducted in a four-party system like MasterCard. MasterCard receives no portion of the interchange fee.

Under the four-party model, the roles performed in the payment card transaction are clearly separated between acquiring banks and issuing banks.

MasterCard Four Party Model

Issuing banks incur a higher portion of the costs of items such as security and fraud protection technology, payment guarantee for merchants, as well as developing payment innovations and billing and administering millions of MasterCard® and/or Maestro® card accounts.

Consequently, a key element to ensure the competitiveness of the four-party model involves correcting that cost imbalance between issuing banks and acquiring banks in providing services to both cardholders and merchants. The interchange fee acts as a balancing mechanism aiming to ensure the attractiveness of payment cards for both consumers and merchants. If there were no interchange fees, issuers would not be in a position to offer attractive products that benefit cardholders and merchants.

The four-party model helps drive efficiency and facilitates new players to enter the payment market, thereby boosting competition. It is designed to drive benefits for all parties in a payment transaction, including:

For Consumers:

- increased international acceptance of their cards ; and
- more innovative card products and solutions.

For Merchants:

- enhanced competition for card acceptance services – driving increased efficiencies and increasing value, particularly to small and medium size merchants ;
- increased standardisation – helping to reduce technology costs such as terminals ;
- greater innovation – increasing the payment options available to merchants (such as offline authorisation for low-value payments) ; and
- access to a larger cardholder base.

For Banks:

- the ability, over time, to consolidate international card processing activities onto common platforms – reducing costs with increased efficiencies ; and
- innovative products to support competitive advantage in the market-place.

A four-party model also increases the opportunity for cross-border issuing and acquiring. Issuers can more easily issue cards in additional countries. Acquirers can more easily offer services in many countries, resulting in greater choice for merchants. Merchants, especially the larger ones, can centralize their transactions, gaining benefits of scale.

Although MasterCard interchange rates have generally been available to merchants through requests to acquirers or other card acceptance service providers, MasterCard believes that providing easy access to its interchange rates will help merchants make better choices regarding payment services.

MasterCard interchange rates are reviewed regularly, and MasterCard will publish its interchange rates generally concurrent with each rate update. While we will endeavor to keep the rates and related criteria on the Web site up to date, it is possible that this Web site will not be absolutely current in all regards. In the event of any discrepancy between the rates and criteria found at this Web site and those rates and criteria MasterCard deems to be the official rates and criteria, the official rates and criteria will apply.

Merchants may always seek more information on interchange rates and their eligibility criteria from their acquiring banks.

MasterCard Intra-EEA Fall-back POS Interchange