Global Regulatory Trends: Interchange Regulation


New research from Mercator Advisory Group examines the international state of interchange regulation.

Author: Tristan Hugo-Webb
Published on: November 20, 2013



November 20, 2013 – Around the world, legislators and regulators are taking aim at interchange fees and trying to reduce or cap the amount of fees financial institutions and the global card networks can charge merchants for accepting payment card transactions.

Despite scant evidence from countries that were among the first to introduce interchange regulation that regulation achieves its intended purpose, namely increased savings to both consumers and merchants, regulatory authorities are imposing or proposing to impose debit and credit interchange rate caps and interchange revenue streams globally are under threat.

Though the full effects of interchange regulation are not felt for years after, based on empirical evidence from Spain and Australia among other countries, the cap the European Commission proposed in July 2013 will have a considerable impact on all participating countries across the region set the domestic industry back a number of years as happened following domestic regulation in Spain and Australia.

“From creating standards around data privacy to classifying new payment players, European authorities have demonstrated in the past a strong desire and willingness to introduce broad reaching payments regulation. While interchange regulation in Europe prior to 2013 was largely done at the domestic level, new proposals point to a pan European approach to interchange fee regulation (however not exclusively),” comments Tristan Hugo-Webb, Associate Director for the International Advisory Service at Mercator Advisory Group and the primary author of the report.

This report contains 10 exhibits and 23 pages.

Companies mentioned in this report include: MasterCard, Visa, American Express, Diner’s Club, Groupement des Cartes Bancaires.

Members of Mercator Advisory Group’s International Payments Advisory Service have access to these reports as well as the upcoming research for the year ahead, presentations, analyst access, and other membership benefits.


Highlights of the report include:


  • Global and Europe-specific payment card usage trends  
  • A summary history of interchange regulation around the world
  • An in-depth examination of the European Commission’s 2013 proposals to cap debit and credit card transactions across Europe
  • A review of evidence from Spain and Australia, early adopters of interchange regulation, on the effects of regulation on the local payments industry 



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