Europe's interchange caps: what the EU rules mean for your card fees

Part of Fees and rules by country. See the guides for every market we cover.

If you take card payments in the European Economic Area, a big part of what you pay is limited by law. The Interchange Fee Regulation, in force since 2015, sets a ceiling on the fee that card issuers can charge on most consumer cards. It is the reason that taking a debit card payment in many European countries costs a fraction of what it costs in places without such a cap.

But the regulation is narrower than people assume. It caps one layer of the cost, for some cards, on some payments. This guide explains what is covered, what is not, how the right to unblended pricing works and what to look for on a European statement. It is general information, not legal advice, and you should check current rules and your own contract.

What does the regulation cap?

The regulation, Regulation (EU) 2015/751, sets limits on interchange fees for card-based payment transactions.

Those two figures apply to consumer cards. They are the same caps that were kept in the UK for domestic payments after Brexit. See UK interchange caps and the PSR review for how the UK position has developed.

What is not capped?

Several things sit outside the caps, and they account for much of the variation in what merchants pay.

• Commercial and corporate cards. Business cards are not covered by the consumer caps, and their interchange can be much higher.
• Cards issued outside the EEA. A card from outside the EEA is not capped in the same way, and these payments often cost more.
• Scheme fees. The fees charged by the card networks are not capped.
• The provider's markup. Your provider decides this, and it can differ widely.
• Card-not-present payments between regions outside the EEA arrangements. Cross-border situations can fall outside the caps, as the UK to EEA case shows.

For a business whose customers mostly use consumer cards, the cap keeps the interchange layer small and predictable. For a business-to-business seller, the uncapped commercial cards can be the larger part of its costs. See debit, credit and commercial card fees.

What does it look like in euros?

A Dutch online shop takes €30,000 in a month: €18,000 on consumer debit cards, €8,000 on consumer credit cards and €4,000 on commercial and non-EEA cards. The commercial and non-EEA rate of 1.40% is an assumption for the example.

Interchange is 0.39% of turnover overall. The commercial and non-EEA cards are 13% of turnover but 48% of the interchange. A change in that mix moves the bill more than anything else in the interchange layer.

How does unblended pricing work?

The regulation gives merchants the right to ask for pricing that shows each cost separately. Under it, providers must offer, and charge, merchant service fees that are individually specified for each category and brand of payment card, unless the merchant asks for blended fees. The result is that you can ask your provider for an unblended or interchange plus quote, and you should be able to see:

• The interchange fee for each card category
• The scheme fees for each brand
• The provider's own fee

If your statement shows a single blended rate and you want to see the layers, ask in writing. Our guide to interchange plus, blended and flat rate explains how each presents costs, and acquirer markup shows how to find your provider's share. The exact rights and how they are implemented vary by member state, so check the regulation and your national regulator.

What are the surcharging rules in Europe?

Surcharging on consumer card payments is restricted across the EEA under the payment services rules, which is why many European businesses cannot add a card fee at the till. The details and exceptions vary by country, and the rules for commercial cards differ, so check your national rules. See surcharging, cash discounts and dual pricing for a comparison of several markets.

Online payments, strong customer authentication and decline rates

For online sales in Europe, two other things affect cost and conversion. The first is strong customer authentication, the two-step check required for many online card payments under the EU payment services rules. It adds a step for the customer, and payments that fail the check are declined or abandoned, so a merchant can lose sales without seeing a fee. The second is the choice between an acquirer and a payment service provider. An acquirer gives you your own merchant account, often with interchange plus pricing and a contract. A payment service provider pools many merchants under one account, usually with a flat or blended rate and no contract. The best choice depends on volume and card mix, as set out in interchange plus, blended and flat rate.

A few practical points for European online sellers:

• Know your decline and abandonment rates. A fee is only part of the cost of a failed payment.
• Ask whether authentication is handled for you. Some providers manage the exemptions that allow a smoother checkout.
• Check how cross-border sales are priced. A card issued in another EEA country is still inside the caps, but a card from outside the EEA is not.
• Look at the currency. Selling in a currency other than your own can add conversion charges.

Country-by-country detail differs, so check your national regulator and your provider's terms.

What should you check on a European statement?

1. Which pricing model are you on? Blended or unblended.
2. Is interchange shown by card category? Consumer debit, consumer credit, commercial.
3. Do the consumer rates match the caps? Debit at 0.20% and credit at 0.30% for EEA consumer cards. A higher consumer rate needs explaining.
4. What is the scheme fee total? Divide by turnover.
5. What is the markup? See acquirer markup explained.
6. What share is commercial and non-EEA? It may explain a high effective rate.
7. What fixed fees apply? Terminals, gateway, PCI and minimums.
8. Compare the effective rate with a quote. See effective rate explained.

What do the caps not guarantee?

The caps limit one layer. They do not guarantee a low bill. Two merchants in the same country, with the same sales, can pay very different amounts if one pays a high markup and fixed fees and the other does not. Scheme fees have also been rising in recent years, according to industry commentary, which can offset part of the benefit of capped interchange. Always look at the total and the effective rate.

For consultants

In Europe, the clearest conversation starts with unblending. Ask the merchant for an interchange plus view of their last month, then compare each consumer line with the cap and look at the commercial share. If they are on a blended rate and their mix is mostly consumer debit, the gap between the blend and the real cost is often large. The checkmyrates calculator works in EUR and shows each card type with its own rate.

Frequently asked questions

What is the EU interchange cap?

Interchange on consumer debit cards is capped at 0.2% and on consumer credit cards at 0.3% for payments inside the EEA under Regulation (EU) 2015/751.

Are commercial cards capped?

Not by the consumer caps. Commercial and corporate card interchange can be much higher.

What is unblended pricing?

Pricing where interchange, scheme fees and the provider's fee are shown separately. Merchants have the right to ask for it under the regulation.

Does the cap make my card fees low?

It limits the interchange layer for consumer cards, but scheme fees, the provider's markup, fixed fees and uncapped cards still affect your bill.

Can I surcharge card payments in the EU?

Surcharging on consumer cards is restricted across the EEA, with national variations and different treatment for commercial cards. Check your own country's rules.

Do the caps apply to cards from outside Europe?

Not in the same way. Cards issued outside the EEA are outside the consumer caps, and such payments often cost more.

Figures in this guide are examples to show the method. Fees, rules and rates change, so check your own statement, contract and current rules before you decide. This is general information, not financial or legal advice.