In response to signals from the market, the Aruba Fair Trade Authority (hereinafter: the AFTA) conducted an investigation into payment card transaction fees in Aruba. These are fees that banks charge to retailers, restaurants, and other points of sale when customers pay with a debit or credit card.

The AFTA’s investigation shows that payment card transaction fees in Aruba are very high compared to other countries (including EU member states, the United States, and New Zealand).

The main cost component of payment card fees consists of interbank fees set by Mastercard and VISA, for the mutual execution and settlement of transactions for each other’s clients. For Aruban banks, these fees are many times higher than what is common in other countries. Due to these high interbank fees, the rates that Aruban banks charge merchants for debit and credit card payments are also very high.

The interbank fees of Mastercard and VISA are currently unregulated in Aruba, whereas in many other countries — such as the EU member states — maximum limits apply that are far lower than the rates applicable in Aruba.

The AFTA therefore makes several recommendations that will contribute to a reduction in these fees. The main recommendation is for Aruba to introduce regulation setting a maximum level for the interchange fees set by payment card companies, as is the case in many other jurisdictions.

General information

Card payments are very common in Aruba. Aruban commercial banks issue various types of payment cards, and merchants accept various global card brands. When an Aruban or foreign consumer uses a payment card to pay for goods or services, the Aruban merchant does not receive the full amount paid by the consumer.

A share of the amount is withheld by the merchant’s bank (the acquirer) as the “Merchant Discount Rate” (MDR). The largest component of the MDR consists of the “Interchange Fee” (IF) which is set by the card schemes. The IF is an interbank fee that the merchant’s bank must pay to the bank that issued the consumer’s card (the issuer) (see Figure 1).

Figure 1. Direct costs related to payment transaction

A major development in Aruba’s payment system is the replacement of Maestro with Mastercard Debit as of July 1, 2023. As a result, banks in Aruba shifted to issuing Mastercard Debit or Visa Debit2 cards.

AFTA received indications that the transition from Maestro to Mastercard Debit resulted in an increase in the average MDR charged by banks to merchants for accepting card payments. Mastercard essentially doubled the IF during the transition from Maestro to Mastercard Debit. This resulted in a 52% increase in the average MDR for interbank transactions involving a locally issued payment card.

AFTA emphasizes the seriousness of the very high IFs in Aruba’s specific context. Most payment cards are used by tourists. These cards are issued by foreign — often American —banks. Aruban acquirer banks must pay the high IFs to these foreign issuers for each transaction. These high IFs are passed through by Aruban banks to merchants in the MDR charged. Merchants, in turn, pass these MDR costs on through the prices of their goods or services. Ultimately, all Aruban consumers bear the cost of the fees paid to (mostly) foreign banks.

The IFs set by the card schemes and applicable to all banks in the system (Multilateral Interchange Fees, or MIFs) have a competition-restricting effect. This is because the uniform application of MIFs effectively creates a price floor for MDRs; merchants cannot negotiate the level of the IF with their bank.

The IF often forms the main component of the MDR. The annual IF costs for the Aruban commercial banking sector (the banks acting as acquirers) are estimated at $28 million, or Afl. 50 million. Part of these costs relate to transactions between local acquirers and issuers, but the majority (around 88%) represents

1 Europese Commissie. (2016). Antitrust: Regulation on Interchange Fees: Antitrust: Regulation on Interchange Fees.

2 Prome cu Visa Debit, tawatin V Pay, e carchi debito di Visa. Esaki no a wordo emiti na Aruba.

payments from Aruban acquirers to foreign issuers. This is unsurprising given the size of Aruba’s tourism sector but means that substantial amounts flow to banks outside Aruba.

IFs in Aruba are much higher than in countries where interchange fees are regulated. International examples (including the United States, the European Union, and New Zealand) demonstrate that regulation results in significantly lower IFs.

In addition to the current levels of IFs and MDRs, there are further concerns regarding payment card services. Fee structures lack transparency, and the card schemes impose certain rules – such as the “Honor All Cards Rule” and the “Non-Discrimination Rule” – that restrict merchants’ ability to take measures aimed at reducing payment costs.

In Aruba, consumers can choose between several payment methods, each with its own cost structure. In addition to card payments, consumers can pay in cash or use services such as Pay.aw and Sentoo. The Central Bank of Aruba’s payment infrastructure, I-Pago, also offers technology that supports further modernization of the payment system and enables new payment services. AFTA notes, however, that existing alternative payment methods are still limited in scale and currently exert little competitive pressure on Mastercard and Visa card payment fees.

As a result of this investigation, the AFTA makes the following recommendations:

· Introduce legislation setting a maximum interchange fee (IF) for Aruba. Mastercard3 and Visa’s4 rules allow for such legislation. Many countries — including the U.S., EU member states, and New Zealand — have implemented legislation to establish maximum IF levels. This has significantly reduced fees.

· Introduce legislation limiting the Honor All Cards Rule (HACR). By prohibiting the requirement that merchants must accept all cards of a brand regardless of their cost, merchants gain more bargaining power and greater ability to manage costs. This also enhances competition among card issuers.

· Introduce legislation requiring commercial banks to provide transparency about the fees charged to merchants. This strengthens the position of merchants and supports competition with other payment methods. AFTA calls on banks to jointly develop a periodic, standardized reporting method on merchant cost structures and is prepared to play a facilitating role in the process.

· Stimulate the development and expansion of alternative payment methods. This is important for competition in the payment services market. Banks can play a key role by collaborating with each other and with new payment service providers. If there are indications of obstacles preventing new providers from entering the market, AFTA will launch an investigate into these barriers.

3 Mastercard rules (3 June 2025), chapter 8.4 ‘Establishment of Intracountry Interchange and Service Fees’.

4 Visa Core Rules and Visa Product and Service Rules’ (October 2025), chapter 1.1.1.3. ‘Compliance with Laws and Regulation’.

To view a more detailed version of AFTA’s recommendation, please click here.

To read the full report in dutch click here.