Examining the current state of interchange rates

Interchange rates are a key component to merchant payment solutions.

For the international business world, interchange regulations are one of the more complicated topics of debate. Understanding the global trends in this medium will be key to setting up a new standard in the industry.

A new report from Mercator Advisory Group examined the current state of international interchange regulation. It looked into the world of legislators and regulators that are setting interchange fees, and examined whether a reduction or cap on the amount that financial institutes and global card networks can charge merchants interchange fees for accepting payment card transactions would be viable.

The study found that there is little evidence that a cap accomplishes its intended goal of saving money for both merchants and customers. In fact, it seems like the opposite could be happening as interchange revenue streams globally are under threat and could set the financial industry of some countries back years. Despite this, there is still a need to create widespread agreed-upon regulation.

"From creating standards around data privacy to classifying new payment players, European authorities have demonstrated in the past a strong desire and willingness to introduce broad-reaching payments regulation," Tristan Hugo-Webb, associate director for the international advisory service at Mercator Advisory Group and the primary author of the report, told the news source.

When it comes to merchant card services, understanding interchange rates should be a priority. They affect every organization that accepts card payments. With the help of a payment solution provider that understands these scenarios, any business can be sure they stay up-to-date on the latest interchange regulations.

by Ty Hardison

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