Banca Intesa Belgrade adopts Interchange Fee regulation
On 17 December 2018, the Law on Multilateral Interchange Fees has entered into force in Serbia. It was a part of the financial regulations package adopted by the Serbian Parliament in 2018, which enforced the Banks to become compliant at high speed.
What is the Interchange Fee?
Each time a person swipes or taps their payment card on a POS, numerous processes are happening in the background with the aim to authenticate and finalize the payment. One of those processes is the payment of interchange fees.
They are paid by the retailer's bank to the bank that issued the card each time someone uses a credit, debit or prepaid card to make a payment. Interchange Fee Regulation was imposed by the European Union back in 2015 with two main reasons behind it - to simplify fee structures for card-based payments and limit this burden on merchant side and to take a step towards the creation of an unified EU payments market in this regard.
BANCA INTESA BELGRADE TAKES A STEP FORWARD
In line with the harmonization of its legislation with that of the EU, the National Bank of Serbia issued a Law оn multilateral interchange fees and special operating rules for card-based payment transactions for the Banks to transpose a similar regime as the Interchange Fee Regulation in EU. The role of Mercury Processing Services International was to carry out required changes on its back-office processing systems thus enabling Banca Intesa Belgrade to be compliant with the regulatory requirements.
of the most important changes in processing were enabling the model for
defining fees, implementing the interchange rules specific to the region of
Serbia for the calculation of the interchange fee of Mastercard / VISA, implementing
the domestic rules for calculating the IF for the payment system DINA, MC and
VISA as well as changes in transactional interfaces.”
Filip Jelenić, Key Account Management, Mercury Processing Services International
COMPLIANCE: MERCURY LEVEL
Mercury Processing Service International has also undergone this process and finalized it in 2016. At that time, this is what our Compliance Expert, Marko Marijanović, said about the process:
"The project started immediately after the European Union revealed the Interchange Fee Regulation. We explored every detail and subsequently learnt a lot about interchange fees.
We believe that this Company can boast itself as a true card processor with interesting value added to “classical” services.
We were able to support the most important requirements of the IFR– show the interchanges fee and make it available to merchants. We believe the project was quite successful keeping in mind that it had 2 parallel streams: (a) interchange fees alignment stream, and b) stream for alignment with other business rules (which itself has substreams: co-badging, electronic and visual identification of cards and HACR, separation of schemes and processing and “unblending”).
The first one was interchange fees alignment stream, and the second one was stream for alignment with other business rules (which itself has substreams: co-badging, electronic and visual identification of cards and HACR, separation of schemes and processing and “unblending”)."