Interchange Fee Regulation (IFR)

The Regulation on Interchange Fees for Card-based payment transactions was aimed at addressing the widely varying and excessively hidden interchange fees, posed as an obstacle to the Single Market and a barrier to innovation. It caps the interchange fees for the most widely used cards and imposes business rules, including transparency obligations on banks, card schemes and retailers to improve the functioning of the payment market for all cards. The stated aim of the EU Council is to reduce costs for both retailers and consumers, to help create an EU-wide payments market and help users make more informed choices about payment instruments.

The Regulation entered into force on three different moments:

  • 8 June 2015 – general requirements
  • 9 December 2015 – requirements regarding interchange fees, license and information to the payee.
  • 9 June 2016 – division of processor and scheme, honour all cards rule, and co-badging related requirements


Implementation / enforcement 12/2014 - 04/2015
Discussion / consultation 04/2015 - 06/2015
Implementation / enforcement 06/2015 - 06/2016
In effect 06/2016 -

The interchange fee cap rules apply since 2015, and the business rules apply since June 2016.

 At each stage of the payments value chain, there are opportunities to add value, lower transactions costs, enhance the effectiveness of marketing through data mining and offer a wider variety of options and experiences in payment methods and currencies to payers and payees. By utilising third parties to provide key business functions along this chain, users and providers of payment services may benefit from the best-of-breed technologies employed by such parties. Outsourcing these non-core activities to third party providers also eliminates the need to make significant investments in technology and personnel . This regulation may lead to better customer experience and a new business model in the payments market, suited to the rapid evolution of electronic payment transactions.

Further information:
KPMG: Payments

Martijn Berghuijs Director
Categories: Financial Market Organisation