Following concerns raised in the Competition Commission Bank Enquiry Report regarding interchange fees, the South African Reserve Bank initiated the Interchange Determination Project in 2011 to review interchange rates applied in all relevant payment streams. Two payment streams were selected for the initial phase of the project, namely ATM and all card-related streams.
The card payment stream phase included investigations into debit, credit and hybrid cards (e.g. cheque cards), as well as cash-back at point-of-sale (withdrawals at point-of-sale). This phase has now been concluded and the following interchange fees have been determined.
A single rate has been determined for cash-back transactions at a fixed rate of R1,11 applicable from 1 January 2015.
The interchange rate for cards currently consists of a variable rate, being a percentage of the transaction. This variable rate has been retained; however, the new interchange structure has been adjusted, resulting in 12 rates, instead of the current 3 rates. This was done to achieve the balance required between additional complexity (innovation and risk) and keeping the rates as simple as possible.
The new interchange rates for debit and credit card transactions are as follows:
|Debit Card||Credit Card|
|Card-present purchase (issuer and acquirer EMV1compliant)||0,44%||1,48%|
|Card-present purchase (only the issuer is EMV compliant)||0,52%||1,55%|
|Card-present purchase (only the acquirer is EMV compliant)||0,36%||1,41%|
|Card-not-present purchase (issuer and acquirer is 3DSecure compliant)||0,48%||1,73%|
|Card-not-present purchase (only the issuers is 3DSecure compliant)||0,53%||1,89%|
|Card-not-present purchase (only the acquirer is 3DSecure compliant)||0,43%||1,57%|
|Cash-back at POS||R1,11/transaction|
The new rates will be effective from 1 January 2015 and will be reviewed on an ongoing basis.