European Union governments agreed to cap interchange fees on debit and credit card transactions.
The cap applies to both domestic and cross-border payments, which cost EU businesses about €10 billion per year, according to Reuters. Credit card fees will be capped at 0.3% of the transaction value. Cross-border debit card fees will be capped at 0.2% of the transaction value, while domestic debit card fees will be capped at 0.2% of the annual weighted average transaction value of all domestic transactions within the card scheme.
Additionally, retailers will be allowed to choose which cards they accept, effectively ending the “honour all cards” rule.
Margrethe Vestager, commissioner in charge of competition policy, called the legislation “good for consumers, good for businesses.” She added that it should lead to lower prices for consumers while releasing “the breaks that have so far held back innovation.”
However, Visa warned that there is no guarantee that merchants will passed their newfound savings on to consumers. “We continue to have serious concerns that the regulation will have unintended consequences, particularly for consumers, and that it could stifle future innovation,” Visa said.
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