"This Regulation returns the right of decision-making to merchants and provides the conditions to pay for payment card acquiring less. Until now, retailers had almost no possibilities to influence the rules and practices established by payment card schemes. We expect that foreign-registered payment service providers will seize the opportunity to enter the Lithuanian market, thereby intensifying competition and improving the quality of services in the relatively concentrated market," says Marius Jurgilas, member of the Board of the Bank of Lithuania.
The Regulation lays down that, as of December 2015, the interchange fee for debit cards shall not be more than 0.2%, for credit cards – not more than 0.3% of the value of a transaction. According to the Bank of Lithuania's preliminary estimate, due to the significantly reduced interchange fee merchants will save up to EUR 18 million over a year.
Payment cards are the most often used electronic payment instrument in retail trade; however, Lithuania still lags well behind from the EU average. In 2013, there were 52 payment card transactions in Lithuania per capita; the EU average is 86 transactions, in Sweden – 250, Estonia – 169, Latvia – 75 transactions. In 2013, there were 1.5 cards per capita in the EU on average, while in Lithuania – 1.2 cards. In 2014, the value of payments executed with all types of cards in Lithuania amounted to EUR 3.1 billion.
Interchange fees are normally applied between card acquiring payment service providers and card issuing payment service providers, belonging to a certain payment card scheme. Interchange fees account for the major share of merchant service charges. Merchants, in their turn, include their card acquiring costs, as all other costs, in the total prices of goods and services. Owing to competition among payment card schemes, in order to persuade payment service providers to issue their cards, interchange fees in the market normally do not decrease but increase – contrary to the usual impact, which competition has on prices in the market economy, the Bank of Lithuania said.
The Bank of Lithuania's study showed that in 2011 in Lithuania the interchange fee for the use of debit cards was on average 0.94, credit cards – 1.07, while the average fee payable by merchants – 1.44% of the value of a transaction.
