Thursday, January 12, 2006

Mexico Takes Lead in Forcing Lower Interchange Fees (Bloomberg)

Citigroup, Bilbao to Lower Mexican Credit Card Fees, People Say

Jan. 12 (Bloomberg) -- Mexican banks, bowing to pressure from central bank Governor Guillermo Ortiz, agreed to lower fees on credit and debit cards at a cost of $100 million in annual revenue, bankers who helped draft the proposal said.

The charges the banks plan to lower are so-called interchange fees, or the money the merchant's lender pays the bank that issued the card. The fee makes up part of the bigger commission that banks levy on shops to process card payments. That overall fee reaches as much as 4.5 percent in Mexico.

Mexico is joining the U.S., U.K., Spain and Australia in seeking to lower fees that banks levy on retailers, restaurants and other businesses to process card payments.

[source: Bloomberg, click here for complete coverage]