Economic and Monetary Affairs Commitee back caps on card fees across the EU

For credit card transactions, MEPs backed the European Commission’s proposal to cap the bank’s fee at 0.3% of the transaction value. For debit card transactions, the committee amended the proposed cap to 7 euro cents, or 0.2% of the transaction value, whichever is the lower.

The fees that banks charge retailers for processing shoppers’ payments should be capped, Economic and Monetary Affairs Committee MEPs decided in a vote on Thursday. The cap would apply to both cross-border and domestic payments in the EU and would take effect one year after the rules enter into force, according to a press release.

Banks’ card payment fees cost EU retailers over €10 billion each year, according to the European Commission figures. These fees are not transparent and they differ between EU member states, where they are subject not to legislation but to decisions by national competition authorities.

These service or “interchange” fees are charged by banks belonging to card schemes such as Visa and MasterCard, which together control the lion’s share of the market. Retailers are charged for every card transaction and add the costs to the prices of goods or services they offer.

Under the new rules, retailers would also be free to choose which cards to accept, unless they are subject to the same interchange fee which, moreover, must comply with the cap set by these rules.

The rules will be put to vote by a full house at one of the upcoming parliamentary sessions.