Study on new developments in including as regards application of the card-based payment markets, relevant aspects of the Interchange Fee Regulation : final report

This study provides an assessment of new developments in card-based payment markets, with a focus on the Interchange Fee Regulation's (IFR) impact on the market since 2018. The report reviews the recent evolution of the payment sector, focusing on the evolving trends regarding traditional means of payment versus new means of payment, as well as the rise of alternative forms of payments and the associated technologies required for their functioning. In the context of the IFR, it provides an analysis regarding the recent evolution of fees in the market - specifically scheme fees (though data was not collected from International Card Schemes) and interchange fees - as well as the impact of these fees on the development of merchant service charges (MSCs). Given the limited availability of data regarding these fees, a full and comprehensive analysis could not be completed on these trends. Therefore, this analysis is based on extensive stakeholder consultation for insight. The report also examines the prevalence of blended versus unblended fee schedules as well as the preferences of merchants. Finally, the concept of co-badging is explored with a focus on the complexities of co-badging in digital wallets and the obstacles to choice of application for merchants and consumers.