A three-party system describes a payment system (usually a card payment system) with the following three parties:
- the payer (often referred to as the cardholder),
- the payee (often referred to as the merchant) and
- a payment service provider who acts as the payment service provider of the payer and the payee and often operates the payment system.
The most commonly known three-party systems are the payment systems offered by American Express and PayPal. The term “three-party system” is particularly important in connection with the regulation of interchange fees. According to Article 1 para. 3 (c) of Regulation (EC) 2015/751, the limitation of the amount of interchange fees does not apply to three-party systems.