Card fees within the EU

Updated: 6/9/2015

When paying with your card abroad, the payee or payment service provider is not allowed to charge a fee, it the same fee is not charged for payments with a national credit och debit card. 

Image of a pile of creditcards and cash.

These rules are mandatory, according a regulation on cross-border payments, (see link on the right side of this page). The regulation prohibits discrimination between national and cross-border transactions and the regulation applies to all countries in the EU and does not need to be implemented through national law.

How does it work in real life?

Example 1: A debit card is used to withdraw cash in either euro or kronor in a cash machine. If the bank that issued the card does not charge a fee to withdraw cash in euro or kronor in a Swedish cash machine it is prohibited to charge a fee to withdraw cash in euro or kronor in a cash machine abroad. As long as the bank charges the same fee in both situations it does not discriminate between national transactions and cross-border transactions and therefore adheres to the rules of the regulation.

Example 2: A credit or debit card issued by a Swedish bank is used in another country in the EU where fees are charged for withdrawing cash from a cash machine. The Swedish bank does not charge any fees at all and therefore adheres to the rules of the regulation. The foreign bank that operates the cash machine charges a fee for all withdrawals of cash regardless of which country the card was issued in and therefore also adheres to the rules of the regulation. These situations are easily misunderstood since the person withdrawing cash has to pay a fee abroad but doesn’t have to pay a fee when he is withdrawing cash in his home country, however, as none of the banks are discriminating by imposing different fees for national and cross-border transactions they are adhering to the rules of the regulation.

Directive with mandatory and voluntary rules

There is also a directive, (see link on the right side of this page), that determines the minimum rules that the EU countries must implement through national law, as well as the additional rules that the EU countries voluntarily may impose through national law. The EU countries may, for instance, prohibit the payee, (the store where the buyer uses his or her card), to charge a fee when the buyer pays by debit or credit card.

To buy flight ticket from a foreign airline

In general, Swedish law apply when you buy something online from a foreign company that directs its business towards the Swedish market. Specific rules apply however, if you buy a flight ticket from an airline's website.

In some cases, the airline may be allowed to charge a fee if you pay by card, for example if the airline has made a choice of law in its travel agreement. In these cases, the chosen country's law apply, and if the chosen country allows the airline to charge a fee, then it is allowed to charge a fee from foreign consumers as well. This exception is applicable for travel agreements even if the airline directs its business towards the Swedish market, despite the fact that Swedish law would have applied for other products and services.

Example 4: An Irish airline charges a fee for card payments. The airline has made a choice of law in their transport terms that states that Irish law is applicable to the travel agreement. As fees for card payments are allowed according to Irish law the airline has the right to charge a fee when the buyer makes a card payment.

In Sweden it is prohibited to charge a card fee

Sweden has chosen to completely prohibit the payee to charge card fees when the buyer uses a debit or credit card. But it may vary in the EU countries. The prohibition of card fees in Sweden can be found in chapter 5, article 1 of the Law (2010:751) on payment services. It is important to note that in Sweden it is not prohibited to charge a general administration fee or payment fee as long as the same fee applies to all payment methods. Payees are also allowed to set a minimum amount for card transactions.

Example: A Swedish trader charges an administrative fee for all different payment options and does not accept card payments for amounts below 50 Swedish Kronor. This adheres to both the rules of the regulation and the Swedish implementation of the directive as there is no discrimination between national and cross-border transactions, as the fee is charged for all different kinds of payment options and as it is allowed in Sweden with a minimum amount for card payments.