Serbia’s central bank is preparing a seemingly technical change to payment-card regulation that carries much broader significance for domestic merchants, banks, tourism operators, e-commerce platforms and the country’s gradual alignment with European financial-market rules. The National Bank of Serbia plans to amend the law on interchange fees so that payments made in Serbia with cards issued abroad are brought under the same cost ceiling that already applies to domestic cards issued by Serbian banks.
The proposed reform targets a gap that has become more important as Serbia’s service exports, tourism flows and international consumer spending have grown. Since 2018, Serbia has capped interchange fees on domestic card transactions at 0.2% of the transaction value for debit cards and 0.3% for credit cards. Those limits reduced the regulated component of card-acceptance costs for Serbian merchants when customers paid with locally issued cards. But the same framework did not fully cover foreign-issued cards used in Serbia, leaving domestic retailers, hotels, restaurants, petrol stations, online merchants and service providers exposed to materially higher costs on transactions made by tourists, diaspora visitors and foreign business travellers.
That imbalance is now large enough to merit regulatory intervention. According to central bank data reported in the Serbian press, foreign-issued cards were used at Serbian POS terminals in 2025 to pay for goods and services worth RSD 211.26bn, across around 59mn transactions. Foreign-card ATM withdrawals added another RSD 80.5bn, across 3.3mn transactions. This is no longer a marginal corner of the payments system. It has become a visible part of Serbia’s retail economy, particularly in Belgrade, Novi Sad, ski and spa destinations, border areas, fuel retail, hospitality, private healthcare, online services and premium consumption linked to foreign visitors.
The central bank’s proposal therefore goes beyond lowering one category of banking fee. It is an attempt to prevent Serbia’s merchants from carrying a higher payments burden precisely on the transactions that are supposed to represent an expanding export-of-services channel. When a foreign tourist pays a hotel bill, restaurant bill or retail purchase in Serbia, the merchant is effectively selling a Serbian service to a foreign customer. If the cost of accepting that card is significantly higher than the cost of accepting a domestic card, part of the margin from that export transaction is transferred into the card-payments chain.
The NBS has described the problem as a double imbalance. Serbian merchants pay more when foreign cards are used in Serbia, while Serbian card issuers earn lower fee income when Serbian cards are used abroad than foreign issuers earn when their cards are used domestically. The central bank’s response is to apply the same basic logic used in the European Union: cap the interchange fee so that card acceptance becomes cheaper and more predictable for merchants, while improving transparency in a market where the final cost often depends on a mixture of interchange fees, card-scheme fees and acquiring-bank margins.
The distinction matters because interchange fees are only one part of the merchant service charge. A merchant does not usually pay the interchange fee directly to the issuing bank. The merchant pays a broader acquiring fee to the bank or payment-service provider that supplies the POS terminal or payment gateway. Inside that charge are the interchange fee, card-scheme fees and other operational or commercial costs. Lowering the interchange component does not automatically eliminate all costs, but it reduces one important floor beneath the total merchant charge and gives merchants more room to negotiate.
Serbia has already seen that mechanism at work. After the original 2018 law reduced domestic interchange fees, the average contracted merchant fee for card acceptance fell sharply. NBS data previously showed the average contracted merchant charge declining from around 2% at the end of June 2018 to 1.06% by the end of the third quarter of 2021. That earlier reduction is the central bank’s practical argument for extending the model. If fee caps lowered domestic card-acceptance costs, then extending caps to foreign-card transactions should deliver additional savings in sectors with high exposure to international customers.
The proposal is also designed to mirror the EU framework. In the European market, interchange fees for consumer debit and credit cards have long been capped at 0.2% and 0.3%, respectively. For inter-regional online transactions, the levels are higher, reflecting the different risk and cost profile of card-not-present payments. Serbia’s planned online caps of 1.15% for debit cards and 1.5% for credit cards follow that same structure. The result is a regulatory architecture that separates physical POS payments from online transactions rather than treating all card payments as identical.
For Serbian merchants, the practical relevance is strongest in sectors where foreign-card transactions are frequent and average ticket sizes are meaningful. Hotels, short-stay accommodation, restaurants in tourist zones, rent-a-car companies, petrol stations on international corridors, luxury retail, private clinics, event organisers, e-commerce providers and travel-service platforms are likely to feel the change most directly. These businesses often accept cards because foreign customers expect card payments as a default option. Refusing cards is commercially unrealistic; absorbing high merchant fees weakens margins; passing costs into prices risks making Serbian services less competitive.
The reform may be particularly important for smaller merchants. Large retail chains and hotel groups usually have stronger bargaining power with acquiring banks and payment processors. They can negotiate lower merchant-service charges because of transaction volume. Small merchants, family hotels, restaurants, specialised shops and local service providers have far less leverage. For them, a high card-acceptance cost is not a marginal treasury issue but a direct hit to profitability. A regulated cap on the interchange component gives smaller businesses a stronger base from which to negotiate and reduces the asymmetry between large chains and smaller operators.
The tourism angle is central. Serbia has spent years positioning itself as a growing urban, medical, conference, event and regional weekend destination. Belgrade’s hotel, restaurant and entertainment economy depends heavily on foreign visitors, diaspora spending and cross-border mobility. In that environment, foreign-card acceptance is part of the infrastructure of tourism competitiveness. A payment system that charges domestic merchants more for foreign customers effectively reduces the net benefit of tourism receipts. Lowering those costs supports merchant margins without requiring a fiscal subsidy or a direct state support programme.
The same logic applies to e-commerce and digital services. Serbian online merchants selling to foreign customers face higher payment-processing costs, fraud-management requirements and chargeback risks. The planned 1.15% and 1.5% caps for online debit and credit transactions do not make online card payments as cheap as physical POS transactions, but they do set a ceiling in a segment where fees can otherwise become difficult for smaller exporters to predict. That is relevant for software services, digital products, online retail, booking platforms, education services, creative industries and other businesses that sell across borders but operate from Serbia.
For banks and card networks, the reform is less comfortable. Interchange-fee income ultimately flows to card issuers, while acquirers, schemes and processors compete around the broader merchant-service charge. Lower regulated fees reduce one revenue channel and may encourage banks or payment providers to recover margin elsewhere, through terminal fees, monthly service charges, scheme-related pass-through costs, account packages or higher fees on other banking services. The NBS has acknowledged that risk, but its argument is that Serbia is not inventing an isolated domestic experiment. It is importing levels already accepted in a major regulated market, leaving less room for a credible claim that Serbia is imposing an unreasonable or commercially unworkable cap.
That does not mean the reform will automatically translate into lower final prices for consumers. Payment-cost reductions usually first appear in merchant margins. In highly competitive sectors, some of the benefit can move into prices, discounts or improved service. In less competitive sectors, merchants may retain the gain. The more direct and measurable effect is likely to be on business costs, not consumer prices. A merchant paying less to accept foreign cards has a cleaner margin on the same sale, stronger incentive to accept non-cash payments and less reason to impose minimum card-spend rules or steer customers toward cash.
The reform also carries a shadow industrial-policy message. Payment rails are part of national economic infrastructure. Serbia has promoted its domestic DinaCard system for years as a lower-cost national alternative, especially for domestic transactions and smaller merchants. International card networks remain indispensable for foreign visitors and cross-border commerce, but the central bank clearly wants a market in which international card acceptance does not come with excessive rents extracted from domestic merchants. The amendment therefore sits at the intersection of competition policy, payments sovereignty and EU-style regulatory convergence.
The banking-sector implications should not be overstated, but they are real. Serbian banks are profitable, liquid and well capitalised, and the loss of some fee income on foreign-card transactions will not change the structure of the sector. The more important issue is fee composition. Banks in Serbia, like banks across the region, have relied heavily on non-interest income from payments, cards, account maintenance and transaction services. Regulatory pressure on card fees reduces one part of that fee pool and nudges banks toward more transparent pricing and stronger competition in acquiring services.
For the acquiring market, the change may increase pressure to unbundle fees and disclose cost components more clearly. Serbia’s existing card-fee framework already requires greater transparency in the way merchants are informed about interchange fees, card-scheme fees and merchant-service charges. In practice, however, many smaller merchants still experience card acceptance as a single blended cost with limited room for negotiation. Extending caps to foreign-card transactions should make it easier for merchants to ask why their final acquiring fee remains high if the regulated interchange element has been lowered.
The macroeconomic significance lies in the scale of the card-flow data. With RSD 211.26bn in foreign-card POS purchases in 2025, even small percentage changes in merchant costs can represent meaningful savings across the retail and services economy. A reduction of just one percentage point in total acceptance cost on that volume would be worth about RSD 2.1bn in annual merchant-side margin relief. That is not an official forecast, but it shows why the regulatory discussion matters. In a services economy where margins are often thin and labour, rents, energy and inventory costs have all risen, payment fees are not invisible.
The reform also comes at a time when Serbia is under pressure to modernise financial services and align more closely with European standards. Payments regulation has become one of the more practical areas of convergence because it affects consumers and businesses directly. Unlike some EU-alignment chapters that appear abstract to the average company, card-fee regulation changes the cost of doing business at the cash register and online checkout. That gives the reform a practical visibility that many financial-sector laws lack.
There will still be implementation questions. The final legal wording will matter, including the treatment of commercial cards, three-party schemes, card-not-present transactions, cross-border acquiring models and the reporting obligations imposed on payment-service providers. Enforcement will matter as much as the cap itself. If banks and processors compensate by increasing opaque ancillary charges, the intended benefit could be diluted. If merchants are informed clearly and competition among acquirers improves, the reform can produce a broader reduction in payment-acceptance costs.
The political economy is also favourable for the regulator. Merchants are an easier constituency to defend than card issuers when the public argument is about lowering the cost of accepting payments from tourists and foreign customers. Consumers are unlikely to oppose the measure, because the fee is not directly visible to them. Banks may resist quietly, but the EU-alignment argument limits how strongly they can frame the proposal as excessive intervention. International card networks will remain central to Serbia’s payment ecosystem, but under a more constrained pricing model.
Serbia’s wider retail market is moving deeper into digital and non-cash payments, and that trend will not reverse. The question is whether the gains from digital payments are distributed mainly to banks and card networks, or shared more evenly with merchants and, through competition, consumers. By extending interchange-fee caps to foreign-issued cards, the NBS is signalling that tourism growth, service exports and digital commerce should not become a high-fee corridor for the payments industry.
The reform is small in legal form but strategically important in market effect. It turns foreign-card acceptance from a tolerated cost of doing business into a regulated component of Serbia’s service-export infrastructure. For a country trying to expand tourism, e-commerce, hospitality and cross-border services, that is the right place for the debate to move. Payment costs are no longer a back-office issue for merchants; they are part of the competitiveness of the Serbian consumer economy.
