With the news this morning that Mastercard are looking at increasing the interchange fee from 0.2% to 1.15% for overseas transactions, will this mean that Curve loses out on the benefit of using the card abroad?
Financial Times: Mastercard to increase fees for UK purchases from EU
Curve has 2 licenses, one from the UK for UK residents, one from Vilnius, Lithunia for the EU.
So this interchange fee increase could actually mean a good thing for Curve.
UK resident buys from EU merchant: use UK license to charge UK underlying card (low fee), use EU license to charge EU underlying card (low fee), use UK license for merchant to receive higher interchange fee.
Good to hear
Friendly correction: Lithuania
Probably bad news to the UK-issued cards, including Curve card, as it is a Mastercard UK issued card. The EEA merchants could simply stop accepting Mastercard UK-issued cards.
Good-case scenario: Curve gets more interchange fee, if there isn’t any EEA disruption.
Mastercard is to increase the fees EU firms face to take payments from online shoppers from the UK by at least 400%, in a move that could mean higher prices for consumers.
When a credit or debit card is used, a percentage of the purchase price is paid by the retailer to the bank that issued it as an interchange fee, which is set by a payments firm.
Mastercard’s interchange fee is currently 0.3% on credit card payments and 0.2% on debit card payments but it has told EU firms that these will increase to 1.5% and 1.15% respectively from 15 October.
Given that they accept US-issued mastercards, which will often have interchange higher than 1.5%, this seems unlikely.
In Portugal, a lot of merchants already don’t accept Mastercard credit cards because of interchange fees. (And because of that, also the Mastercard debit cards.)
We have a cheaper payment network than Mastercard/Visa/Amex, “Multibanco”.
Good to hear. One plus side of Brexit
Isn’t Curve recognized as an UK-issued card?
For example, I have a Revolut card, with Lithuanian IBAN, but the card is recognized as an UK-issued card.
To trick the POS from recognizing the Curve and other UK-issued cards as UK cards, they have to be modified internally to an EEA location or issue new ones based on a EEA country.
my mistake. So used to just saying Litauen
hm, not sure about this. Wouldnt all POS always prompt DCC for Curve cards when paying at a € merchant? That used to be the case with the very first batch of Curve cards while still on beta. Now I never get prompted again whether I want to pay in € or GBP.
no, not all POS terminals are offering dcc. it’s up to the terminal provider
This article points out that the increase in interchange fees will apply only to online cross-border transactions between the UK and EEA. So for spending at points of sale, there will be no change.
ok, but doesn’t curve make kind of “online” transactions between merchants and underlying cards? is it ok that a lot, a LOT of non-uk users still have uk bin cards?
I was going to ask the same question, as potential destroying effects on cards free from exchange fees in Europe (I have more than one) are worrying.
As non-UK user I have UK bin card, but since 2021 transactions from curve in underlaying card statement shows as done from Lithuania, not UK.
DCC is up to the merchant in some places just doing same for all is quickest but DCC can benefit the merchant your paying like the exchange rate is normally wider if your doing pound to euro when paying in euro from a pound card than the standard rate and normally closer together if paying in pound from a euro card
yeah, i know that. what i don’t know how the new rule will be introduced? how mastercard will charge the new fee? based on card bin? based on something else? so i’m a bit worried, especially that national bin cards don’t work above 5000 whatever national currency when you want to go back in time
btw i don’t really know that “vilnius lt” payment location is something real or just a technical trick. i withdrew some cash in the beginning of january, look at the payment location. vilnius gb - strange isn’t it?
Vilnius,LT is where most UK based fintechs received the emoney license from after Brexit. Possible that your Polish bank adds the GB at the end because of the UK bin?
Mine shows LT correctly on German bin.