The European Parliament has voted overwhelmingly to cap the “interchange fees” that credit card providers collect from retailers, in a move it says will save consumers and merchants €6bn a year.
Fees will be capped at 0.2 per cent of the transaction value for debit cards and at 0.3 per cent for credit cards. EU member states can also impose lower percentage caps and maximum fee amounts.
The regulation still needs the approval of the Council of Ministers, expected later this year.
“A cap on card fees should be great news for credit card users — if the savings are passed on to consumers,” said David Mann at uSwitch.
Jonathan Hill, one of the UK’s commissioners in Brussels, commented that the cap “paves the way for more innovation and competition in the field of online and mobile payments.”
The EU believes that uncertainty over interchange fee rules is holding back the adoption of new technology such as payments by mobile phone.
“Crucially, merchants will see the costs of payments fall, which should in turn drive down prices for consumers,” added Mr Hill.
However, Mr Mann cautioned that in some countries that had already introduced fee caps, retailers “have simply padded their bottom lines with these savings.”
“We can only hope that this time things will be different, he added.
Interchange fees are deducted by the bank that serves the merchant from the amount paid by the customer. They are particularly high in countries where credit card adoption is not as widespread as in the UK, such as Germany and Poland.
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