European Parliament and Council reach deal to regulate bank fees


Ecommerce Europe welcomes the agreement reached before Christmas by the European Parliament and the Council on setting European-wide limits to multilateral interchange fees (MIFs).These fees are charged by consumers’ banks to merchants for payment card transactions made with either debit or credit cards, and can be a burdensome cost for merchants.

Ecommerce Europe’s concerns taken into account
The deal reached between the Economic and Monetary Affairs (ECON) Committee of the European Parliament and the Italian Presidency of the Council includes most of Ecommerce Europe’s views on how the bank fees should be regulated. For example, the deal sets that fees charged to merchants for accepting consumer card payments will be limited to 0.2% for debit cards and 0.3% for credit cards, with the option for Member States to set lower fees. This measure will ensure the continuation of current well-functioning national schemes that already provide lesser of a burden on merchants.

Ecommerce Europe also had concerns that the previous proposal of Member States to calculate the caps based on a weighted average would not be transparent for merchants. The weighted average mechanism changes from state to state and results in confusion as to which maximum fees apply. A compromise has now been reached between Member States and the European Parliament that national governments may opt for a weighted average cap for domestic transactions but with a sunset clause of 5 years after which 0.2% maximum will apply. This limit of 0.2% will make the transactions more transparent for retailers.

Some competition issues still persist
Ecommerce Europe has still concerns about the exclusion of commercial cards from the MIF regulation. Even though the agreement reached sets a narrower definition which restricts commercial cards to business expenses only, Ecommerce Europe still believes that the exclusion of such cards from the text can hamper the development of a competitive e-payments environment for web shops. Therefore the Payment Services Directive II should ensure that (online) merchantsin all Member States may surcharge transactions with such commercial cards. Three-party scheme cards, such as American Express, are also excluded from the regulation. Ecommerce Europe believes that for a competitive and clear e-payments landscape all cards should be included in the regulation of the maximum fees.

Next steps
The agreement reached still has to be formally voted upon by the ECON Committee and then formally approved by the European Parliament’s plenary. This is expected to happen early this year. After the endorsement by the European Parliament, the Council will have to adopt the same text, probably in February or March 2015. Finally, the legislative file will be published in the Official Journal of the European Union.

Multilateral interchange fee caps must apply within 6 months of the adoption of the text. The regulation is expected to come into force by Fall 2015. Ecommerce Europe will monitor the legislative process ensuring that the interests of the sector will be taken into account by the policy makers.

For further information on Ecommerce Europe’s recommendations, please click here for the updated version of the Position Paper on e-Payments (2014).