Brazil’s central bank on Monday issued a ruling capping fees paid by commercial establishments to debit card issuers in a bid to lower costs to consumers.
Starting on Oct. 1, so-called interchange fees will be capped at 0.80 percent of transaction values, while averaging no more than 0.50 percent, according to a statement.
The measure is the latest example of the central bank using its powers as regulator of the financial system to seek consumer protections in an increasingly concentrated banking sector.
Reuters had reported on January 24 that the bank wanted to regulate debit card fees to boost the use of electronic payments and add to already enhanced consumer protections.
“With this measure, we expect that the reduction will be passed through to commercial establishments and then to consumers due to competition and the possibility of price differentiation,” the bank said.
Fees paid by retailers in debit card transactions, which also include transfers to payment processors such as Cielo SA or PagSeguro Digital Ltd, are freely set in Brazil and usually range from 1 percent to 3 percent of transaction value.
According to the central bank, interchange fees rose to 0.82 percent from 0.79 percent over the last eight years.