Of Special Interest


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8th July 2011

French card interchange fees reduced

The Autorité de la Concurrence, the French competition regulator has forced a significant reduction in the card interchange fee that is paid to the card issuing bank or to the owner of an ATM. The interchange fee paid on purchases will be reduced from 0.47% down to 0.3%. The interchange fee on cash withdrawals from an ATM will reduced from €0.72 to €0.57. This represents reductions of 36% and 21% respectively.

The interbank payment fee, paid by the retailer's bank to the cardholder bank, will decrease from 0.47% to 0.3% of the transaction value and the interbank withdrawal fee paid by the cardholder issuing bank to the owner of a particular ATM machine will be reduced by €0.72 to €0.57. The regulation relates only to domestic card card payments.

The regulator is under the impression this should result in a reduction in the fees charged to cardholders by the banks. Under pressure the banks had offered to reduce interchange fees, however not by as much as the regulator has determined.