BRUSSELS (Reuters) - An initial deal on capping fees charged for paying with debit or credit cards across the 28-nation European Union has been reached by negotiators from EU governments and the economic committee of the European Union parliament, the parliament said.
The cap would apply to both cross-border and domestic card-based payments and should result in lower costs for consumers, the parliamentary statement said.
Currently, such interchange fees for card-based payments, paid by the merchant’s bank to the bank that issued the card, are not transparent and differ between EU countries.
“These fees are charged by banks belonging to card schemes such as Visa and MasterCard (so-called four-party schemes, involving an issuing bank, a merchant’s bank, the retailer and the card user) which together control the lion’s share of the market,” the statement said.
For cross-border debit card transactions the negotiators agreed on a cap of 0.2 percent of the transaction value.
For domestic transactions, EU countries can apply the cap of 0.2 percent to the annual weighted average transaction value of all domestic transactions within the card scheme, the parliamentary statement said.
For credit card transactions, the agreed cap is 0.3 percent of the transaction value.
Under the initial deal the new rules would not apply to the so-called three-party card schemes such as Diners and American Express, which involve only one bank, provided the card is both issued and processed within the same scheme.
Commercial cards used only for business expenses would also be exempt from the new capping rules.
These caps will take effect six months after the legislation enter into force. But it first needs to be endorsed by EU governments and by the Economic and Monetary Affairs Committee, before being put to a vote by the full Parliament next year.
Reporting by Jan Strupczewski; Editing by Alison Williams