Andrea Dunlop, CEO of card solutions and acquiring at Paysafe, takes a look at whether retailers are missing out on interchange fees. Has the door been opened for issuers to profit more on debit cards?
Interchange fees are fees paid by acquirers to a card issuer each time a payment transaction occurs, and was originally designed to cover the cost of operating the card payment system, as well as compensating them for providing security, guarantee and efficiency of payment and protection against fraud. However, regulators argued that interchange fees lacked transparency for merchants, were too high in many cases and could be exploited for price fixing. With debit card interchange fees in the UK at eight pence per chip and PIN transaction and credit card interchange fees at 0.77% for Visa transactions and 0.80% for MasterCard transactions, most of the focus was on realigning credit card interchange fees, especially MasterCard’s World and World Signia products which were at 1.30%-1.45%. Read more here.