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One Single Market needs one set of rules for card fees

This week, Europe’s politicians begin trialogue talks to decide final rules on how much payment cards will cost merchants and consumers in card fees. The end goal is more competition and innovation in our payments market. The commerce sector fears that unless MEPs make crucial changes to the Council’s text, we will fail to achieve these aims.

EuroCommerce Director-General, Christian Verschueren, said, “This is one of the most

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One Single Market needs one set of rules for card fees

important pieces of legislation which will affect merchants and consumers for decades to come – we must get it right. Compromise is necessary but not at the expense of basic single market principles.”

The problems with the current text are all about the cost of debit cards. EuroCommerce wholly supports the protection of national debit schemes, including those which operate on a merchant service charge cap. But we must also embed into the regulation three essential political principles: legal certainty, a single market and a level playing field.

The current text disregards these principles in the following ways:

  1. Legal certainty: the ‘weighted average’ proposal would allow member states to choose a system whereby some cards carry fees above the basic 0.2% cap and others below. The ‘average’ would be calculated on a yearly basis through a complex reporting mechanism involving excess administration and cost. This is wholly untransparent, allowing neither merchants nor consumers to check if the rules are being respected.
  2. Single market: the current text is full of member state options. In addition to the weighted average above, one member state wants an option to postpone the arrival of lower fees for a further 2 years. This fragmentation goes entirely against the single market principle.
  3. Level playing field: the current proposal would completely exempt commercial cards or three-party schemes such as Amex from all caps at a market share below 5%. This will create loop-holes and unfairly penalize some sectors (e.g. hotels, airlines) over others, creating market segments where these highly expensive cards predominate.

The commerce sector calls on the Council and the Parliament to:

  • Remove the weighted average and return to a 0.2% or 7 cent fixed cap maxima (with member state option to go lower), as agreed in the Parliament’s first reading text in April. The text should also while allow all national debit schemes to continue to continue to function
  • Implement all the caps at the same time – ideally within 6 months;
  • Include commercial cards and three-party schemes into the regulation and in any event, remove any special exemption for three-party schemes.

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