It’s strange to think that barely a decade ago, a standard consumer credit card transaction in Italy could carry an interchange fee of around 1.6%. In Poland, even debit card payments, typically lower cost due to lower risk, were often charged close to 1.5%, placing them among the most expensive in the EU. And these were not complex or international purchases, just routine domestic transactions.

Today, the same types of payments are capped at 0.3% for credit and 0.2% for debit.

The card, the issuer, and the merchant might be the same. What changed was the regulatory framework: the introduction of the Interchange Fee Regulation (IFR – EU 2015/751).

This month marks 10 years since the IFR came into effect (June 2015). Prior to this regulation, interchange fees across Europe were highly inconsistent. Some regulators, like France and Spain, had introduced national caps. Others, like Italy and Poland, still allowed higher rates based on card scheme rules or local market dynamics.

To address this imbalance and reduce the burden on merchants, the European Commission introduced the IFR to set uniform interchange limits across the European Economic Area, in line with the EU’s ambition to create a fairer, more predictable Single Market for payments.

What is an interchange fee
An interchange fee is the fee paid by a merchant’s bank (acquirer) to the cardholder’s bank (issuer) every time a card transaction takes place. It’s intended to cover the cost of handling the payment, fraud risk, and credit exposure. The merchant indirectly pays this fee as part of the overall cost of accepting cards.

What is the IFR
The Interchange Fee Regulation (EU 2015/751) is an EU law that limits the amount card issuers can charge in interchange fees for consumer card transactions. It applies to Visa, Mastercard, and other four-party schemes across the EEA. It does not apply to commercial, corporate, or business cards, which remain uncapped.

What the IFR changed

• Standardised consumer card caps
  0.2% for debit card transactions
  0.3% for credit card transactions
  These caps apply to both card-present and card-not-present transactions unless domestic regulators set stricter rules.
• Cross-border harmonisation
  The IFR applies across the EEA, which included the UK until Brexit. Since then, UK-issued cards used in the EU are treated as non-EEA, meaning they are no longer subject to capped rates. This reclassification reintroduces higher interchange fees for many merchants.

Interchange optimisation didn’t go away
Before the IFR, many large merchants invested in interchange optimisation strategies, carefully selecting acquiring setups, routing logic, and acceptance policies to reduce fee exposure. While the IFR simplified pricing for intra-EEA consumer cards, interchange remains a material cost driver in several areas.

1. Commercial cards: business, purchasing, and corporate cards are out of scope and still priced at scheme-set rates
2. Non-EEA-issued cards: UK and US cards, among others, are no longer capped under the IFR when used in the EU
3. Local market nuances: some domestic regulators apply their own rules or operate with additional carve-outs

What is interchange optimisation
Interchange optimisation refers to the practice of minimising interchange fees by influencing factors such as:

• The card types you accept (e.g. preferring debit over credit)
• Which acquirers you use and where they are located
• Routing logic to reduce cross-border processing
• Whether you qualify for exemptions tied to low-risk or recurring transactions

The IFR transformed the baseline economics of consumer card acceptance in Europe. But for global merchants and cross-border industries like travel and marketplaces, interchange management still matters. Ten years on, the focus has shifted from broad caps to active optimisation, especially in areas the regulation does not touch.