 |
EUROPE. The Travel Retail Fair Payment Alliance (FPA) has hailed news of a deal that should offer retailers fairer credit card fee and rate structures and lead to a more transparent and competitive market for card fees across the EU. The agreement over a “˜Payments Package’ was struck between the European Parliament, the Council of Ministers and the European Commission under the EU’s Italian Presidency.
The Payments Package is the name given to two draft EU legislative proposals covering Interchange Fees and reform of the Payments Services Directive (PSDII). The latter covers areas such as payment providers and surcharging, though the rules on interchange fees are the crucial area for many travel retailers. These are transaction fees that are paid between the card holder and retailers’ banks; fees the retailer is obliged to pay without negotiation.
Details of this so-called “˜Trialogue’ deal are still to be examined in full as it came just before the Christmas holidays. It is known that the agreement has maintained the 0.2% capped charge per transaction endorsed by the Parliament as well as reintroducing a fixed value limit of 5 euro cents, which is lower than the 7 cents level sanctioned by MEPs. The credit cap is unchanged at 0.3%. Crucially, said the FPA, these rules – which are expected to apply to both cross-border and national transactions within six months of the legislation entering into force – allow Member States to go lower than these caps.
Other key features of the deal are understood to include cross-border acquiring at the cap levels of 0.2% or 0.3%. Licensed three-party schemes (such as where a credit card or similar scheme is provided under a bank’s name), have been re-introduced to the text. Universal Cards – a joint debit and credit card that exists only in the French banking system – will be regulated out of existence under what is called a “˜sunset clause’ after one year.
Weighted average fees for debit card transactions are expected to be phased out after five years. Weighted averages were fought for by a handful of Member States, noted the FPA, but these were a point of contention for many stakeholders because the notion is opaque and difficult to monitor. As the result of lobbying, a more straightforward 0.2% cap will apply instead after five years.
Concerns over excluding commercial cards from the caps have been allayed to some extent, said the FPA, because the definition of these cards is understood to be more tightly written. That should ensure they do not become “expensive quasi-consumer cards”, said the FPA.
FPA leader and Chairman of Kappé International Jacques Parson said: “This news is a very welcome Christmas present. It is a good outcome for us all. Like Christian Verschueren, the Director-General of EuroCommerce, my thanks go to the Italian Presidency for their hard efforts to make this happen. The process would have been put back many months without this deal. Yes, there could have been some more icing on the cake by including commercial cards and a shorter period of weighted averages. But the result we have today would have been deemed impossible when we started our work and my thanks go to our network for their support and contribution. Our next steps are to ensure the institutional formalities are completed and to create awareness of the new rules and how they will apply in practice for us and importantly, our customers.”
The FPA said it was optimistic that the formalities will be completed and the texts adopted into law during the first or second quarter of 2015. That would pave the way for the new Interchange Fee rules to enter force sometime by Autumn 2015.
