Regulators have been capping interchange fees for decades. More than 30 countries have already imposed price controls on interchange fees. The U.S. is actually late to the party, and what happened everywhere else tells you a lot about what to expect.
Brazil began earlier. In October 2018, the Central Bank capped debit card interchange fees for domestic cards. Merchant discount rates dropped 22.8% by early 2020. Banks absorbed the hit with no offset from credit card revenues.
They didn’t stop there, in April 2023, prepaid card interchange fees were capped at 0.7%.
The pattern is deliberate: debit first, then prepaid, then credit. Brazil’s central bank is clearly sequencing.
Mexico is still in the pressure phase. The country’s antitrust watchdog has pushed financial regulators to fix what it characterizes as an anti-competitive card processing market and establish an interchange fee cap. The political will is there; the regulation isn’t fully implemented yet. It’s where the U.S. was ten years ago.
In the rest of LatAm, Colombia, Chile and Costa Rica, are studying and consulting rather than capping, though central banks mandates in all three have published technical studies on the issue. They don’t know when it’s going to happen, but their central bank know what they need to do.
Globally, two cases stand out as cautionary tales.
Europe went furthest and fastest. Since December 2015, interchange fees for consumer debit cards are capped at 0.2% and consumer credit cards at 0.3%. The result? Annual fees rose and rewards programs became more conservative almost overnight, mirroring what happened in Canada and Australia too.
Spanish banks raised credit card annual fees 50% and debit card fees 56% to compensate. From 2008 to 2010, issuing banks increased interest rates and generated nearly 80% more income from interest payments than in 2005. The fee cap didn’t hurt bank revenue. It just moved where that revenue came from, and consumers paid more in different places.
Australia is in the middle of its own reckoning right now. Interchange makes up roughly 33% of all revenue banks earn from credit cards. The RBA’s reforms are projected to strip over $910 million in revenue from issuers.
The proposed changes would reduce caps for domestic debit and prepaid to a weighted-average benchmark of $0.06 per transaction, and cap domestic credit at 0.3%, with changes set to take effect July 2026. Australian banks are already warning they’ll cut rewards and raise account fees in response.
The pattern is consistent across every market. Interchange fee caps reduced issuing banks’ incentive to invest in innovative technology, and led banks to reduce access to features like free checking while increasing fees for consumers, effects that were largely regressive, hurting lower-income households most. The merchants benefit. The savings rarely reach consumers in the form of lower prices. And banks scramble to rebuild revenue somewhere else.
That’s the real parallel for U.S. banks watching the OCC. Brazil, Europe, and Australia didn’t get the outcome regulators promised. What they got was fee restructuring, rewards rollbacks, and banks hunting for new revenue lines.
Which is exactly where ACI Worldwide enters the picture. When interchange dries up, the only credible path to holding margins is more transaction volume through cheaper, more diversified rails. That’s the proposition behind ACI’s cloud-native platform, spanning SWIFT, FedNow, and Zelle under one roof.
Multi-rail isn’t just a technical upgrade; it’s a revenue diversification play. European banks that started routing payments across alternative networks a decade ago absorbed the interchange hit better than those that didn’t. The ones that waited until the cap was already law had less runway to adapt.
U.S. banks are not facing a new problem. They’re facing the same problem European and Australian banks faced, just ten years later.
Legacy infrastructure doesn’t play well with multi-rail. And rebuilding it costs time and capital that are harder to justify when interchange revenue is already compressing.
ACI’s cloud-native platform is a real option. But no platform fixes a business model that still depends on fees that regulators are actively reducing.
Banks that treat the OCC pressure as a one-time event to manage will find out what the slow movers in Europe and Australia already know: you cut benefits, raise fees, and still fall behind.