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Interchange Commissions in Ukraine to Lower Gradually: NBU, Visa, and Mastercard Sign Memorandum

Interchange Commissions in Ukraine to Lower Gradually: NBU, Visa, and Mastercard Sign Memorandum

The NBU together with the international payment systems Visa and Mastercard will work to increase competition in Ukraine’s payment market.

The Memorandum on Facilitation of a Competitive Payments Market in Ukraine was signed by Oleksii Shaban, NBU Deputy Governor, Andrew Torre, Visa Regional President for Central Europe, the Middle East, and Africa, and Christoph Baert, Mastercard Senior Managing Counsel, Regulatory Affairs, Europe. The memorandum is open for accession by any other payment system operators or market practitioners.

“Given the strategic importance for Ukraine of further development of the cashless economy and, in particular, the spread of cashless payments, we have agreed on an approach to gradually reduce domestic interbank commission rates (interchange commissions),” said NBU Deputy Governor Oleksii Shaban. “We consider this compromise balanced and well thought-out. This decision will help reduce the cost of cashless transactions, protect the interests of individuals using payment cards, entice competition, and expand opportunities for the emergence of new cashless payment instruments in the payment market.”

To this end, Visa and Mastercard have applied to the Antimonopoly Committee of Ukraine for permission to take concerted action. After obtaining this permission, they will begin to gradually reduce the marginal rates of interchange commissions. Specifically, the commissions will be reduced as follows:

  • from 1 July 2021 – to no more than 1.20%
  • from 1 July 2022 – to no more than 1.00%
  • from 1 July 2023 – to no more than 0.90%.

The NBU has repeatedly emphasized the need to maintain exclusively market-based approaches to regulating the payment market. After all, this allows the financial industry to ensure further growth of cashless payments, reducing the share of the shadow economy and increasing revenues to the state budget as a result of digitalization of payments.

“Over the recent years, Mastercard has been decreasing interchange fees in Ukraine, and we have supported the initiative proposed by the banking sector on providing a further decrease. The proposed Memorandum on a gradual market-driven reduction of the level of interchange fees is aimed at the further development of cashless payments and meets the principles of the free market economy, which is in the interest of all market participants. We look forward to receiving a prompt review of the submitted application by the Antimonopoly Committee of Ukraine and a positive decision, which will allow us to decrease interchange fees starting in July this year,” said Inga Andreieva, Mastercard General Manager in Ukraine and Moldova.

“Visa supports a market-based approach to interchange fee regulation around the world. We are convinced that evolutionary reduction of the rate as envisaged by the Memorandum is the best guarantee for effective development of cashless payments. Our company is committed to continue building Ukraine’s cashless economy together with other industry representatives, and we appreciate the role of the National Bank of Ukraine in developing a transparent competitive environment in the financial market,” said Vira Platonova, Visa CISSEE Senior Vice President and Regional Director.

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