Interchange fees: the invisible cost of every card swipe
Every time you tap your card, three different parties take a cut of the merchant's revenue. The regulation of these fees is one of the EU's most underrated consumer wins.
When you pay €100 at a restaurant with your card, the restaurant receives something less than €100 after the payment network takes its fees. The structure of those fees — split between your bank, the merchant's bank, and the card scheme — is called interchange, and it has been one of the most intensely regulated corners of EU financial law for the last 15 years.
How the money flows
Your card issuer takes an "interchange fee" (the headline number — capped at 0.2% debit, 0.3% credit by the EU). The merchant's acquiring bank takes a "merchant service charge" (usually 0.5-2% depending on card type and merchant size). The card scheme (Visa, Mastercard) takes a smaller "scheme fee". Combined, EU merchants typically pay 0.6-2.5% to accept a card.
Why it is capped
Before 2015, European interchange averaged 1-2% for debit and 1.5-3% for credit. Merchants either absorbed it or passed it to prices. The EU's Interchange Fee Regulation (IFR) capped intra-EEA interchange at 0.2% debit / 0.3% credit, saving European retailers an estimated €2-6 billion per year.
What is NOT capped
Commercial (business) card interchange — these cards get around the cap, so B2B card acceptance stays expensive. Non-EEA card interchange (US tourist paying in Berlin) — these cards charge the full "international" interchange rate, often 1-2%. This is why some merchants add a surcharge on American Express or non-EU cards.
What this means for you
The restaurant that no longer accepts AmEx is not being petty — the interchange differential is real. The small shop that charges a 2% surcharge for cards under €10 is covering a fixed per-transaction fee that is uneconomic at small amounts. And the "cash discount" at a market stall usually just reflects the interchange the merchant saves.