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To Err is Human, to Receive Correct Interchange Fees Divine

New products, new channels, massive technological change and all bundled up into two major releases each year by the card schemes, well, as it says in each closing episode of Frasier – ‘What is a boy to do’

Put simply, the ambition to keep interchange fee structures as simple as possible is under constant challenge by an industry characterised by its dynamism, and the strain placed on those people working at the coalface, just to stay abreast of developments, keeps on rising.

It’s no wonder then that in my time working with Visa, MasterCard and major banks in the UK, Continental Europe and beyond I have come across many interchange fee errors, for substantial sums, which lay undetected for long periods of time. 

It’s not that there’s a lack of focus or attention given to the monitoring and management of interchange fees but the sheer complexity surrounding this aspect of the business allied to continual movements of staff naturally leads to the type of errors I’ve encountered.

Now while interchange fee rates have been in general decline over the last decade or so and a strengthened merchant lobby, regulatory focus and, dare I say it, a pinch of political opportunism is all working to extend that decline, these fees still represent a significant element of an issuers and acquirers P&L so the need to keep ‘ones eye on the ball’ is as important as it ever was. 


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