Visa and Mastercard extend non-EU card fee caps to 2029

Visa and Mastercard have announced an extension of the current caps on tourist card fees in the European Union (EU) until November 2029. This decision, initially set in 2019, aims to maintain stability in the market and provide certainty for merchants and consumers alike.

The fee limits, which were established to resolve an EU antitrust probe, will continue to apply to both physical and online transactions.

The original agreement, set in 2019, capped fees at 0.2% for non-EU debit card transactions and 0.3% for credit card payments in physical stores. For online transactions, the caps are set at 1.15% for debit cards and 1.5% for credit cards.

These caps were introduced to address concerns raised by the business lobby EuroCommerce in 1997, which led to a lengthy investigation by the EU competition enforcer.

Visa and Mastercard have voluntarily agreed to extend these fee caps beyond their original expiration in November 2024. This extension provides stability and certainty for market participants regarding inter-regional interchange rates, distinguishing between cross-border e-commerce and in-store transactions.

The European Commission, acting as the EU’s antitrust watchdog, will continue to monitor the appropriateness of these fee caps.

“Inter-regional interchange fees for debit and credit card transactions under these schemes will remain capped for another 5 years until November 2029. For card present (offline) transactions, the fees will remain capped at 0.2% for debit cards and 0.3% for credit cards. For card not present (online) transactions, the caps will remain 1.15% for debit cards and 1.5% for credit cards,” said the Commission in a statement.

While the extension is a positive step towards maintaining fair competition, the Commission has warned that it will initiate an investigation if evidence suggests that the current fee caps are no longer suitable or effective.

Visa emphasised that the extended fee caps provide stability and certainty for market participants regarding inter-regional interchange rates.

“The Commitments agreed with the EC in 2019, and this new Undertaking, recognise that cross border, e-commerce transactions are fundamentally different to in-store payments,” the company said in an email.

The extension of the fee caps by Visa and Mastercard is a significant development in the payments industry, ensuring continued protection for merchants and consumers against potentially excessive charges.

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