SME Chamber

Commission gives up the fight on interchange?

GRTU is very disappointed at the weak interim compromise announced by the Commission on Visa interchange fees and related anti-competitive rules. We do not consider that it satisfies the antitrust complaint instigated by our EU level representatives EuroCommerce.


At a time when consumers are fighting to keep their heads above water, Visa has announced record profits, this lacklustre compromise sets a very bad precedent for this tax on payments for consumers.

The Commission has succeeded only in obtaining commitments from Visa on debit cards. The 0.20% maximum weighted average interchange fee for Visa debit will allow the company to continue charging retailers and consumers unjustified fees in member states which fall outside the scope of the Commission action, as well as on credit and commercial cards.

Such a maximum figure will further undermine the efforts of the struggling third European card schemes: they will be quite unable to establish any system which offers a fairer pricing model.

We find it odd that the Commission is, as in the 2009 settlement with MasterCard, accepting a solution based on a methodology – the ‘merchant-indifference test' – which has not yet been tested and which is strongly criticised by all stakeholders – including the card schemes. The omission of credit cards from the commitments must also cast doubt on the adequacy of this methodology. We nevertheless welcome the costs of cash study and urge its speedy completion. We look forward to the downward revision of MIF levels, on debit and credit – which both remain unacceptably high.

We are very disappointed that the Commission has opted for this marginal way out on Visa. Since EuroCommerce lodged the first complaints 13 years ago, neither Visa nor MasterCard have brought convincing justification for interchange fees on card transactions.

In particular, EuroCommerce points out that:

The ‘average' fee levels do not correspond to any market reality.

The commitments retain the notion that fees should be a percentage of purchase price: there is no cost justification for this.

There is no justification for omitting credit cards from the settlement. Both types of transaction require the same processing, therefore should attract the same cost. (Retail studies show that the cost of cash handling is 3 euro cents per transaction.)

The barriers to cross-border acquiring for retailers have not been tackled.

We are, however, pleased to note that discussion will continue on credit and deferred debit and that the issue of commercial cards remains open. We also applaud the continued scrutiny of the ‘honour all cards' rule. EuroCommerce calls for the abolition of this rule which hides anticompetitive behaviour behind a confusion of differently priced and ‘premium' cards.

The Commission is sorely mistaken in thinking it will solve the interchange fee problem by allowing merchants to surcharge consumers, who are unwitting hostages to this unfair system. Competition in retail is fierce and most retailers will never discriminate against customers on the basis of the payment means they wish to use. We urge the Commission, on completion of its costs study, to take full account of data from retailers, reconsider the tourist test and revise these calculations.

In addition, the Commission's reliance on surcharging has been wholly undermined by the fact that several large member states have chosen to forbid surcharging under the options allowed in the Payment Services Directive.

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