The Economic and Monetary Affairs Committee Members of the European Parliament (MEPs) voted Thursday to cap interchange fees that banks charge retailers. The cap would apply to both cross-border and domestic payments.
European Commission figures show that interchange fees cost European retailers more than €10bn annually. They differ between EU member states, where they are subject not to legislation but to decisions by national competition authorities. Interchange fees are charged by banks belonging to card schemes such as Visa and MasterCard.
For credit card transactions, MEPs backed the EC’s proposal to cap the bank’s fee at 0.3% of the transaction value. For debit card transactions, the committee amended the proposed cap to 7 euro cents, or 0.2% of the transaction value, whichever is the lower. The caps apply to both cross-border and domestic transactions in the EU and would take effect one year after the rules enter into force.
Additionally, the new rules also address card acceptance. Currently, retailers are often obliged to accept all cards in any given card scheme.Under the new rules, retailers would be free to choose which cards to accept, unless they are subject to the same interchange fee which must comply with the cap set by the rules.
The rules will be put to vote by a full house at one of the upcoming parliamentary sessions.
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