EU Puts Forward New Rules on Payment Services and Interchange Fees
Friday, 26 July 2013
The European Commission have announced a new payment services direction, otherwise known as PSD2, and a new set of regulations designed to tackle and limit interchange fees for credit, debit and prepaid card based transactions throughout the Eurozone.
Payments in the EU account for as much as 1% of GDP, a sum that is estimated at some 130 billion Euros each year, and is something that many MEPs have suggested that the union can ill afford in the current economic climate.
Michael Barnier, EU Internal Market and Services Commissioner, said of the move that:
"Today, the payment market in the EU is fragmented and expensive with a cost of more than 1% of EU GDP or €130 billion a year. These are costs our economy cannot afford. Our proposal will promote the digital single market by making internet payments cheaper and safer, both for retailers and consumers. And the proposed changes to interchange fees will remove an important barrier between national payment markets and finally put an end to the unjustified high level of these fees."
Vice President Joaquín Almunia added: "The interchange fees paid by retailers end up on consumers' bills. Not only are consumers generally unaware of this, they are even encouraged through reward systems, such as points, air miles or other perks like free travel insurance, to use the cards that provide their banks with the highest revenues. Complementing the enforcement of antitrust rules, the regulation capping interchange fees will prevent excessive levels of these fees across the board. A level playing field will be created for payment services providers, new players will be able to enter the market and offer innovative services, retailers will make big savings by paying lower fees to their banks, and consumers will benefit through lower retail prices."
"The Regulation on interchange fees, combined with the revised PSD, will introduce maximum levels of interchange fees for transactions based on consumer debit and credit cards and ban surcharges on these types of cards."