Morocco’s Competition Council announced on Wednesday that it will closely monitor the effects of newly capped domestic interchange fees on the country’s electronic payment market.
The 0.65% cap on transaction values is expected to reduce the cost burden on merchants and encourage broader use of card payments.
The decision follows concerns raised by NAPS SA, a local electronic payment provider, over the dominant role played by the Interbank Electronic Payment Center (CMI) in the market.
In a statement, the council noted that the capped interchange fee, introduced by Morocco’s central bank, Bank Al-Maghrib, on October 1, could lead to significant fee reductions for merchants.
The measure, in turn, is expected to promote the expansion of electronic card payments, which currently account for just 1% of total payments in Morocco — far behind national goals for digitalization and financial inclusion.
The council also underscored the potential for improved competition. Previously, the CMI and its nine shareholder banks had maintained control over interchange fees, raising them multiple times between 2012 and 2019.
The increases strained the margins of other payment acquirers, allowing CMI to retain a near-monopoly and stifling market competition.
“The new cap on interchange fees is a crucial step in addressing this imbalance and providing a fairer environment for competitors to thrive,” the council stated. It also mentioned that the CMI and its shareholder banks have agreed to adhere to the 0.65% cap.
A hearing on October 31
As part of its ongoing investigation, the Competition Council invited interested parties to submit their feedback by October 30, ahead of a final hearing on October 31, where it will review the case. The council will then determine whether the new regulations and commitments from CMI and its shareholder banks will sufficiently address anti-competitive concerns.
Despite previous efforts to liberalize the market, including a 2015 decision to separate payment acquisition from switching services, competition remained weak.
The council pointed out that the rise in interchange fees had limited the ability of smaller players to compete, hampering innovation and preventing the broader adoption of card payments.
By enforcing this cap, Morocco’s regulators are hoping to reshape the market, making it more competitive and aligned with the country’s broader economic goals.