Fabian Demicoli

European Parliament takes strong line on SEPA value for payment users

 The text, proposed by MEP Sharon Bowles, chair of the EP ECON Committee, stresses the importance of involving the users of payment systems in SEPA decisions and calls for the setting of an end date to SEPA. It also urges the European Commission to find a solution on the crucial issue of interchange fees on direct debit and on cards. Its unequivocal message to the Commission and Council is that SEPA should not result in a more expensive payment system for European citizens.

GRTU welcomes Parliament's statement that the full participation of payment system users in SEPA discussions is crucial. We are delighted at this strong statement from the European Parliament that SEPA is not a banking only project: the EU institutions and the banking industry must listen to the needs of European businesses and consumers.

GRTU is particularly encouraged by Parliament's call on the Commission to solve the issue of Multilateral Interchange Fee (MIF) on cards. These non-negotiable fees are passed on to retailers but include marketing practices, such as ‘free' gifts, of no benefit to merchants. EuroCommerce is complainant in the EU competition cases against the card industry's anti-competitive practices, including the MIF.

Retailers have long argued that the MIF impedes SEPA development by making the entry of new players, at lower costs, impossible. In addition, the MIF creates a risk that existing efficient debit card products are replaced by very expensive products and its arbitrary nature leaves the industry with no incentive to combat fraud. It also effectively prevents merchants from shopping cross-border for processing services, thus seriously inhibiting the internal market for payments.

It is vital that the EU institutions act to prevent SEPA from producing a deterioration of the payments market, in terms of prices, competition and quality of service. The whole SEPA for cards project will be a failure if the anti-competitive MIFs on cards remain. It is also clear that for direct debit, no end date can be set until the outstanding problems and uncertainties are resolved.

Abigail Mamo –

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