2.1 Why does the proposed Regulation cap interchange fees at 0.2% and 0.3% for debit and credit card transactions respectively?
The 0.2% and 0.3% caps were proposed by schemes (Visa Europe, MasterCard, Groupement des Cartes Bancaires2) in competition proceedings and appear practical as providing legal certainty while not threatening the viability of these schemes. These levels are based on an estimate of the fee at which a merchant would be indifferent between being paid by card or in cash. The figures have been developed using data from the central banks of Belgium, the Netherlands and Sweden on the cost of payment instruments.
However in practice, fees are still 3%-5% for merchants. No idea why.
because people (intentionally) keep conflating interchange, card scheme fees as well as fees paid to the merchant's acquiring bank in order to make US/UK fees seem more outrageous. Just going off of Stripe pricing, the processing fee is 1.3% for EEA issued cards compared to 2.9% in the US.
