In December 2007, the European Commission presided over a decision on MasterCard’s multilateral interchange fees (MIF). BEUC and EuroCommerce are now highly concerned that the Commission may take ‘the easy way out’ and allow MasterCard, Visa and the banks to maintain (or create new) rules that are inefficient and costly to the whole of society.
“The MIF represent a €12bn burden on our sector and it is directly reflected in the price of goods,” says Xavier R. Durieu, secretary general of EuroCommerce. “The commerce sector is one of the most competitive economic markets and it is clear that the removal of the interchange burden would be of direct benefit to consumers.”
“Europe is facing an unprecedented financial crisis and the purchasing power of the man and woman on the street is threatened”, says Monique Goyens, director of BEUC. “Particularly at this time, it is in the interests of all European citizens that the Euro in our pocket goes as far as possible and is not partially diverted into the unwarranted profits of the banks.”
Both organisations emphasise that a system where each user pays for the services that he chooses is the only efficient solution, as it gives each party an incentive to optimise the system.
“If cheap, efficient national debit cards were to disappear throughout Europe, this would surely represent an out-and-out failure of the SEPA project,” continues Durieu. “The MIF will also lead to the impossibility for third schemes to convince both the banks to issue cheaper cards and the retailers to accept another potential failure for SEPA.”
Card schemes and banks have been charging outrageous fees for decades. There is no reason why fees should be expressed in a percentage of the amount of the transaction. Figures compiled by the banking sector itself show that a Europe-wide debit card could run profitably at a fixed fee of less than one eurocent. “Time has come for banks to deliver SEPA,” concluded Monique Goyens.
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