On Thursday 3 April, the European Parliament voted to cap interbank fees for all card payments.
European lawmakers backed a plan that would see bank charges for processing payments via credit cards capped at 0.3 percent of the transaction value (and at a maximum of € 0.7 or 0.2% for debit cards) for all national and transnational transactions.
According to the European Commission, high interbank fees for card payments are being imposed on businesses by banks costing European retailers more than €10 billion every year. These costs are often handed off to consumers, which leadsto price inflation. Its data suggests the caps would almost halve the total fees levied, which vary widely between member states. It says combined savings could run to 730 million euros ($395 million) a year.
Pablo Zalba, vice-president of the European Parliament Committee on Economic and Monetary Affairs (ECON) and rapporteur for the MIFs Regulation, believes that if implemented, the change would save consumers hundreds of millions of euros. He also claims that“the law is major progress in the harmonization of payment services. It establishes a level playing field at the heart of the single market”.
MEPs decided to include business cards in the law, therefore going against the European Commission’s initial proposition which had not planned to cap them, which triggered a hotly debate during the preliminary discussions on the law.
The adoption of the reviewed directive is no longer expected before the summer since European parliamentary elections will take place in May. The amended law will be thus passed on to the next European Parliament.
On February 11, BETTER FINANCE co-organized a a conference at the European Parliament with its Spanish member organisation ADICAE to discuss the impact of the latest regulatory updates on non-cash payments in the EU on consumers.
BETTER FINANCE still believes that it is necessary to ensure that the capping of interchange fees does not result in undesirable rises on payment card fees for consumers with financial institutions and/or merchants retaining the benefits of the proposed regulations for themselves instead of passing them on to credit card users. We think European institutions should seriously consider improving the European Commissions’ proposal by addressing this key concern of EU consumer representatives.