Card Fees Rise Despite Interchange Fee Caps

CSMPI’s latest Insight magazine reports on card fee changes in 2021 around the world. It suggests that each tweak in the fees may appear small but, overall, the additional revenue is likely to be over $1.1 billion in the US alone. It argues that national regulatory approaches have interacted with fee increases to make payments acceptance costs more complex than ever.

Merchant Service Charges (MSCs) consists of an interchange fee, a network fee and the acquirer’s margin. Regulators have usually chosen to cap the interchange element of the MSC, which is paid to the card issuing bank. Typically, the interchange fee is the largest of the MSC elements.

Below is a list of debit card charges. The variety illustrates the impact regulations have across markets – making them localised, channel-specific and difficult to reconcile.