Fee-cap Models for Payment Instruments: a Policy Perspective

9 September 2026

Banca d'Italia today publishes 'Fee-cap Models for Payment Instruments: a Policy Perspective', the new issue of the series 'Markets, infrastructures, payment systems'.

This note proposes two necessary criteria to ensure that fee-cap models for digital means of payment are both incentive-compatible and administrable. First, individual payment service providers should not be able to materially influence the fee benchmark, otherwise the rule may create incentives to adjust the prices and contractual terms that determine the benchmark itself. Second, the relevant parties should be able to verify compliance with the model at little or no cost. For example, a merchant should be able to determine easily whether a given merchant service charge complies with the applicable benchmark. This would reduce compliance costs and limit the need for costly litigation and enforcement procedures. Based on these criteria, we assess the two main proposals put forward for the compensation model of the digital euro: a merchant-specific rule and a euro area-wide average fee for comparable means of payments. We argue that fee-cap models based on individual contractual information are unlikely to meet the two criteria, while market-wide benchmarks would perform well against both.