Global POS interchange fee income increases 140% in six years
(www.AllPayNews.com) - Global POS interchange fees increased 140% between 2000 and 2006, to $64 billion (€48 billion). This massive growth in POS interchange fees was mainly fuelled by a phenomenal increase in payment card purchase expenditure worldwide and increased interchange rates in the USA, and occurred despite reduced interchange rates in Australia, Europe and elsewhere.
A new study by Retail Banking Research (RBR) analyses the evolving and increasingly complex landscape for POS interchange fees. It forecasts major changes to POS interchange fee arrangements and fee levels around the world.
The study argues that the future for POS interchange fees is uncertain, for five main reasons:
• Competition and other public authority interest in POS interchange fees is continually growing
• Authorities are taking increasingly tough stances on multilateral interchange fee (MIF) arrangements
• The European Commission’s actions and findings – such as the December 2007 ruling that MasterCard’s MIFs are restrictive business practices – influence those of National Competition Authorities
• Pressure from merchants and retailer associations towards reduced interchange fees (or even their removal) is increasing
• There is political and regulatory pressure to converge and standardise fees in the SEPA area.
The study predicts a decline in the levels of POS interchange fees, which in association with changes to interchange rate structures and payment scheme rules will have major strategic implications for payment card organisations, issuers, acquirers, merchants and consumers.
"The Future for POS Interchange Fees" describes the background to the current controversy and provides an independent analysis of recent actions by competition and other public authorities. It looks at trends in interchange rates worldwide, and makes strategic predictions on the future of POS interchange fees and related matters such as MasterCard and Visa's honour-all-cards and (no) price discrimination rules. For more information, interested parties should visit www.rbrlondon.com/interchangefees.
Notes to editors
Retail Banking Research is a strategic research and consulting firm with three decades of experience in retail banking, banking automation and payment systems. RBR assists its clients by providing independent advice and intelligence through published reports, consulting and newsletters. RBR is recognised as the leading provider of premium research on payment cards and ATMs. Banking Automation Bulletin, a research newsletter founded in 1979, is published once a month by RBR.
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