Merchant service charge in card payments lowered additionally

07/05/2021

Merchant service charge in card payments lowered additionally

The NBS informs the public of a further reduction of the merchant service charge in card payments. Namely, since the adoption of the Law on Multilateral Interchange Fees and Special Operating Rules for Card-based Payment Transactions, this charge was practically halved.
Prior to the adoption of the Law on Multilateral Interchange Fees and Special Operating Rules for Card-based Payment Transactions (Law) in mid-2018, at the NBS's proposal, the average merchant service charge for card-based payments at physical points of sale (shops) amounted to around 2% of the transaction amount, while the charge for card-based internet payments was significantly higher. Since then, the amount of merchant service charge practically halved. In Q1 2021, it averaged 1.08% of the transaction amount for brick-and-mortar points of sale and 1.22% for online purchases.
The lowering of the merchant service charge also reflected on the rise in the number of points of sale in our country accepting card-based payments and the rise in internet points of sale - the number of POS terminals increased from 88,009 at end-2018 to 97,751 at end-2020, аnd the number of internet points of sale from 741 at end-2018 to 2,013 at end-2020. This growth is expected to continue in the period ahead.
All the above shows that the NBS's forecasts at the time of proposing the Law came true, since the merchant service charge has dropped significantly and is expected to go further down. For the sake of reminder, the Law also increased the transparency of this charge for merchants, especially small merchants, which strengthened their negotiating position relative to banks. By proposing the Law which came into force in 2018, the NBS intended to protect the interests of payment card users, and, above all, the interests of small merchants, i.e. to help them start accepting payment cards at their points of sale by reducing the costs of payment cards acceptance, as well as to ensure fair operating terms in the payment card market by raising the level of transparency of the fees charged.
The NBS is also the operator of the national DinaCard system which enables a significant lowering of the costs of card payments compared to any payments by international card brands.
We wish to note that the application of instant payments at points of sale which are operated by the NBS is becoming increasingly popular, bringing to merchants low merchant service charges while making the funds available in only few seconds. The NBS again invites banks and merchants to use the potential of the NBS Instant Payments System and to offer, by lowering multilateral interchange fees - new, cheaper cashless payment instruments, which will, by extension, lead to additional lowering of the merchant service charge.

Payment System Department