The Antimonopoly Committee of Ukraine has granted permission to MasterCard Europe S.A. and Visa International Service Association to reduce the amount of domestic interchange fees (interchange rate) paid by an acquirer to an issuer in Ukraine from 0.9% to 0.7% for the period of war.
“The planned changes in concerted actions are aimed at establishing an effective and balanced ceiling on interchange rates, taking into account the interests of all market participants under martial law,” the AMC commented on its decision of 5 October.
The Committee expects that these changes will allow retail chains to maintain the current price level for consumers, as well as contribute to the development of small and medium-sized entrepreneurs and the overall economic development of Ukraine.
The agency clarified that the 0.7% rate will be effective “not earlier than the next business day after 14 calendar days after the date of receipt of the Committee’s authorization until the next business day after 30 calendar days from the date of termination or cancellation of martial law.”
It is noted that after this period, MasterCard and Visa will return to the 0.9% rate agreed with the AMCU before the war.
“The introduction of a further reduction in the interbank commission is an attempt by government agencies and other industry representatives to respond to a request for assistance to retailers who have suffered significant economic losses caused by the war,” the AMCU said.
As reported, a memorandum signed in May 2021 between MasterCard, Visa and the NBU provided for the interchange rate to be set at 1.2% from July 1, 2021, and its gradual reduction, in particular from July 1, 2023, from 1% to 0.9%.
However, during the war, the rate was first reset to zero and then gradually increased to 0.7%. The decision of Visa and MasterCard to return it to 0.9% on July 1 this year was sharply criticized by retailers. The largest banks in the market – PrivatBank, Oschadbank and Raiffeisen Bank – for their part, kept acquiring rates for their clients unchanged (approximately 1.3-1.5%), but called on MasterCard and Visa to support this initiative and cancel the interchange rate increase from July 1, 2023 to 0.9%.
However, Oschadbank noted that “if payment systems do not reduce the interchange rate within one to two months, the bank will reconsider its decision.”
According to the NBU, the share of payment terminals of PrivatBank, Oschadbank and Raiffeisen Bank at the beginning of the year was 60.4%, 19.6% and 7.6%, respectively.
