At the European level, the European Commission has proposed via the Proposal for regulation on interchange fees for card-based payment transactions 2013/0265 (COD) (procedure file), to cap multilateral interchange fees (MIFs). European institutions have identified this as an area which is “hindering the achievement of an integrated market.”
Prior to the proposal there was no EU legislation regulating interchange fees, with fees agreed between the acquiring payment service provider and the issuing payment service provider, which belongs to a certain scheme (such as Visa, Mastercard). These fees are passed onto merchants then onto consumers.
The wide variety of interchange fees paid has resulted in both fragmentation and a number of high-profile antitrust proceedings regarding alleged anti-competitive practices.
A cap of fees was proposed in the European Commission’s green paper "Towards an integrated European market for card, internet and mobile payments."
A vote on the proposal in the plenary session of the European Parliament was held on March 10, 2015. The regulation was passed by 621 votes to 26, with 29 abstentions. The rules must be officially endorsed by the Council of Ministers (which is expected "before the summer") before taking effect 20 days after publication in the Official Journal - only 6 months after the regulation enters into force will the interchange fees begin to apply - this is expected towards the end of 2015.
The regulation caps interchange fees at 0.2 percent for debit card transactions and 0.3 percent for credit card transactions where such cards are used in four party schemes (and three party schemes which use issuers – for instance, all Diners cards fall into this category). Of note, the 0.2 percent and 0.3 percent caps are the rates established in certain competition proceedings.
A timeline of the regulation's progress towards adoption is found below.