CMSPI’s Global Interchange Report analyses the impact of interchange regulation by authorities worldwide and identifies effective methodologies used by regulators to ensure maximum consumer and merchant benefit of regulation.
As of 2019, global regulation limiting interchange, the largest component of the merchant service charge, has generated an estimated $82 billion in annual savings to merchants. This figure includes $10.4 billion a year saved when the European Union lowered interchange in 2015 as well as $9.4 billion in annual savings generated from the 2011 U.S. Federal Reserve caps on single-message debit transactions. Total savings also includes regulations across Europe, Africa, Asia, and the Americas.
The report quantifies the impact of interchange regulation on merchants and consumers, as they are the intended beneficiaries of interchange regulation. In some cases, the financial benefits of interchange regulation to merchants and consumers can be eroded by higher fees and reduced benefits. These include higher network fees, reduced rewards programs by issuing banks, and reduction of savings by the merchant acquirer.
Length: 62 pages