A new survey shows that the majority of high value retailers in Europe believe that draft EU rules to cap interchange fees for electronic payments should only go ahead if they apply to all market players.
The survey was conducted by Ipsos MORI on behalf of MasterCard, interviewing
high value retailers across six European countries to investigate their views on proposed EU payments legislation.
So called three party card schemes, such as American Express and Diners Club, are currently largely excluded from the scope of the draft rules. This is despite the fact that the European Commission acknowledges that they operate an implicit interchange fee model – similar to that applied by four-party models, such as MasterCard and Visa.
The majority (55%) of retailers surveyed would only support the proposed legislation to cap fees for electronic payments if all card network operators, including American Express and Diners Club, were covered. Only 34% would support EU legislation that excludes specific card brands. In the six countries surveyed, more than two in three retailers (69%) rate Amex fees higher with little difference in satisfaction of the services provided.
“Although we appreciate the Commission’s and Parliament’s efforts so far to treat all players in the same way, we believe that the proposals could be improved. As they currently stand, they risk playing directly into the hands of the most expensive market players. Consumers and retailers would end up paying the price. This is hardly what the legislation was intended to achieve,” comments Javier Perez, President, MasterCard Europe.
Should the proposed legislation come into effect, 50% of high value retailers across all countries, claim that they would continue to accept all payment methods while 31% say they would stop accepting the most expensive payment cards.
When asked how they would use any money saved from a cap on interchange fees, 59% of high value retailers across all countries surveyed claim that it would be used to innovate or invest in their business rather than to reduce retail prices for their customers (an option favored by 15%).
Countries where retailers are most likely to use the money saved to innovate their business, in ranked order are France (69%), Spain (64%), Germany (61%), Poland (61%), Italy (51%) and Great Britain (50%).
Only a relatively small number of high value retailers in each country claim that they would reduce retail prices for their customers, in ranked order, Spain is the most likely to do so (20%), followed by Italy (19%), Poland (17%), Great Britain (16%), France (8%) and Germany (8%).
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