Due to Brexit, the UK is no longer part of the EEA region. As a result, transactions between EEA and the UK will qualify as interregional instead of intraregional transactions, with an increased fee as a consequence (interregional fees are higher than intraregional fees).
What does the change mean?
Currently, card not present transactions by EEA merchants accepting UK issued consumer cards trigger an interchange fee of 0.20% for debit and 0.30% for credit cards. The revised consumer interregional interchange fees are 1.15% for debit and 1.50% for credit cards. Please note that for Mastercard the new rates will apply unilaterally for card not present transactions for EEA merchants accepting UK issued consumer cards. Interchange fees will remain unchanged for UK merchants accepting EEA issued consumer cards.
Visa has announced similar changes, however in contrary of Mastercard, the Visa changes will apply bilaterally. This means that the fee increases impact both EEA merchants accepting UK cards as well as UK merchants accepting EEA issued cards. These newly qualified as interregional consumer transactions will be charged 1.15% for debit and 1.50% for credit card transactions. Furthermore, the interchange for Business cards will be charged at 1.60% and Corporate and Purchasing cards at 1.80%. In addition, effective October 16th 2021 Visa announced to introduce a modified International Acquirer fee (part of the scheme fees) of 0.25% for card not present transactions bilaterally between EEA and UK. Visa will rebate the International Acquirer Fee from October through the end of June 2022 to support acquirers and their merchants during this transition.
How will this affect you?
If you have agreed on an Interchange ++ pricing model, you will see an increase in your interchange and scheme fee costs for these specific transactions. If you have a blended pricing model, you will be informed in case these fee increases require pricing adjustments.
October 15, 2021 (Mastercard) and October 16, 2021 (Visa)
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