Fabian Demicoli

Commission proposal on interchange will allow retailers to pass savings on to consumers


The Commission has today
published the long-awaited proposals on the ‘payments package' of a revised
Payment Services Directive (PSD), a Regulation on multilateral interchange fees
(MIF) and a communication on SEPA governance.

These proposals are a
very significant step to bring competition and transparency into how payments
are made and paid for. They should allow retailers to pass savings on to
consumers, bringing them real benefits across Europe in these times of
hardship. Claims by card schemes that retailers would not pass on cost savings
to consumers are nonsensical: price competition and the elimination of
inefficiencies are in the DNA of retailers. The proposed MIF caps and other
measures will give merchants more control over costs, and consumers choice of
payment options. The proposals however falls short of the ideal: merchants had
hoped for the abolition of the MIF as a concept, certainly on debit. A move
away from percentage fees to flat, cost-based transaction fees would have been
more reasonable, especially for debit cards.

Retail also welcomes the
measures contained in the revision of the PSD and the communication on SEPA governance.
The opening of payments markets to new entrants will significantly improve
competition and stimulate innovation. A better balance between payment
providers and payment users on governance is also welcome and should ensure
fairer long-term decision-making.

We very much welcome:

That
the MIF regulation will apply to all consumer card transactions, domestic and
cross-border and that it is a per transaction cap. However, the two-year delay
for implementation at domestic level will unnecessarily delay the bulk of the
consumer benefit from being realised.

The
removal of the ‘honour-all-cards' rule. This will give merchants the freedom of
choice to steer consumers away from over-expensive cards.

The
ability to operate real cross-border acquiring. This will allow true economies
of scale for merchants and should bring card fees down further in the long-term.

The
inclusion of third-party payment providers within the PSD. This will inject
some much-needed competition into the payments market.

Enabling
third-party providers to initiate payments. The ability to access the necessary
account information will help innovative players offer cheaper, more efficient
services and make full use of technological advances in e-payments.

What could be improved:

The
level of caps: we still urge the legislators to reduce the MIF on consumer
debit to zero and improve the level on credit. We

The
persistence of ad valorem fees: we see no justification for the maintenance of
percentage MIFs – especially on debit transactions.

Commercial
cards, which carry the highest MIFs, should be covered by the regulation as well.

The European Economic and
Social Committee (EESC) was requested to draft an opinion on the proposals
issued today by the European Commission. The EESC Bureau appointed GRTU's
Director General and EESC Employers Representative Vincent Farrugia to prepare
a report to be approved firstly by the EESC Single Market, Production and
Consumption Section (INT) and afterwards presented for voting at the EESC
Plenary on the 10th December of this year to be adopted as EESC Opinion.

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