BC sets new limits for prepaid and debit card transaction fees

The Central Bank announced this Monday (26) a regulatory change that establishes new limits for interchange fees charged in transactions with debit and prepaid cards. The measure will take effect from April 1, 2023.

In the case of prepaid cards (issued by fintechs), the cap charged will be 0.7%, while the limit for operations carried out with debit cards (issued by banks) will be 0.5%.

The interchange fee is the percentage paid for each transaction to the card issuer by the merchant’s acquirer, that is, by the person who rents the machines to the merchant. The acquirer transfers the cost of the fee to the commercial establishment, which, in turn, transfers the expense to the consumer.

The range practiced today in transactions with prepaid cards varies from 1.1% to 1.5%, on average. Since 2018, the BC has stipulated an average cumulative charge of 0.5% on the debit card interchange fee and a maximum amount of 0.8% per transaction.

By starting to charge only a maximum percentage per transaction in the case of debit cards, the monetary authority says it will simplify the way in which the limit is applied.

The BC also determined that the deadline for making funds available to commercial establishments is the same, regardless of whether the card is debit or prepaid. In addition, it eliminated the exceptions provided for non-face-to-face transactions and those using corporate cards.

“The measures aim to increase the efficiency of the payments ecosystem, encourage the use of cheaper payment instruments, making it possible to reduce the costs of accepting these cards to commercial establishments, in addition to enabling cost reductions of products to end consumers, in a way that to provide benefits for the whole of society”, said the monetary authority in a note.

In October 2021, the BC released a draft resolution for public consultation that established a ceiling of 0.5% in the interchange fee for transactions carried out with prepaid cards, equaling the limit to the debit rules, which generated a reaction from the sector.

This remuneration is one of the main revenues of fintechs, so a significant reduction could make the business model of a portion of financial startups unfeasible.

According to a survey carried out by Zetta, an organization that brings together fintechs such as Nubank and Mercado Pago, customers of member financial institutions (more than 90 million accounts) would have saved around BRL 24 billion in fees if the 0.5% for prepaid cards was in effect last year.

The BC says it has established a differentiated maximum limit for transactions involving debit and prepaid cards “recognizing their importance for the financial inclusion of the lower income population and for the digitalization of the payment activity, with the consequent reduction in the use of cash for make payments”.

“The regulation simplifies rules, costs and procedures associated with the acceptance of payment instruments. It also increases transparency for market participants regarding the costs involved in the transaction and facilitates the supervision of the application of the rule. payments”, said the municipality.