Why is cross-border interchange higher than domestic interchange?
Cross-border interchange is higher because issuers and schemes price in more fraud risk and currency handling, and because regional caps often stop at the border. In the EEA, consumer cards are capped at 0.2% and 0.3%, while non-European cards used online can reach 1.15% for debit and 1.5% for credit.
In detail
Cross-border interchange is higher than domestic interchange for two reasons. Issuers and schemes price in a higher fraud risk and the handling of foreign currency, and the regulatory caps that protect domestic payments often stop at the border.
The European example
- Inside the EEA: consumer cards are capped at 0.2% for debit and 0.3% for credit.
- Non-European cards in the EEA: under commitments extended until November 2029, caps are 0.2% and 0.3% in store, but 1.15% for debit and 1.5% for credit online.
- UK-EEA online payments: since Brexit, they are treated as cross-border and moved to the 1.15% and 1.5% levels.
What operators can do
Scheme fees also rise on cross-border transactions, through assessment and currency fees. The main lever is local acquiring: processing a payment through an acquirer in the cardholder’s region can turn a cross-border transaction into a domestic one.
See interchange fees, What Is the Merchant Discount Rate (MDR)? and the routing page.