Technical spats set to dog payment cards debate

http://www.euractiv.com/euro-finance/technical-spats-set-dog-payment-news-532324

 

Key rule changes designed to introduce more competition and update the credit and debit card payments landscape are set to ignite a lengthy dispute over technicalities when they come before committee in the European Parliament next week.

The Commission published its update of the Payment Services Directive in July, along with a separate regulation on multilateral interchange fees (MIFs). Both of these have elicited Parliamentary reports in advance of discussion in the economic and monetary affairs committee next week (17 December).

The updated Payment Services Directive aims to cover regulatory and security challenges posed by a range of existing card and new mobile payments services expected to explode onto the European scene over the next two years.

MIFs are charges paid by a retailer to a cardholder’s bank as part of an electronic payment card transaction, whether through a debit or a credit card.

Interchange fees to be discussed by Parliament

The Commission’s proposal would set new capped levels for MIFs at 0.2% and 0.3% of the transaction value for debit card and credit cards respectively.

The Parliament’s MIF report, presented by rapporteur Pablo Zalba Bidegain (Spain; European People’s party), retains that proposal, though some political groups are set to resist the idea.

“There we are going to have the big debate, I am not satisfied about these figures, and have asked where the 0.2% and 0.3% come from,” said Dutch MEP Sophie in t’Veld of the Alliance for Liberals and Democrats for Europe.

Meanwhile, Zalba has proposed changes to the original proposal that are expected to provoke intense discussion amongst MEPs.

He suggested allowing card companies to ask merchants to offer customers the use of all bank cards within a company's portfolio – the so-called 'honour all cards' rule, a practice the Commission wants outlawed. He also proposed that the MIF caps should be applied across a 'weighted average', giving some flexibility as to how card companies apply the caps.

Zalba amendments resisted by merchants

These amendments drew sharp criticism from merchant representatives. “The draft European Parliament report on the proposed Regulation on MIFs would water down the Commission proposal so that the majority of the potential benefits to consumers and to merchants would be lost,” according to a statement from EuroCommerce (12 December), a body representing the retail and trade sectors in Europe.

Meanwhile card companies themselves remain unhappy with the MIF proposal. “MasterCard remains deeply concerned by the preservation of the Commission’s one-size-fits-all approach to interchange across Europe, as it does not appear to be based on any clear methodology,” a statement from the company said.

Interchange levels are only one part of a complex equation, however, with the Parliament simultaneously considering its report on the main proposed update to the payments services directive.

That report, written by MEP Diogo Feio (Portugal; European People’s Party), will be considered at the the same time by the economic affairs committee, but outstanding questions arise over what sort of payments would be captured by the proposed law.

“Speaking to different people it can be hard to determine a position on these issues,” said in t’Veld, adding: “Conflicting interests may be valid interests. On whether three-party and four-party schemes are included and definitions of third party providers there remain some very complex issues.”

Dossiers are complicated, technical

The technical complications may hamper progress on the proposal, but Feio remains bullish that the Parliament can reach a compromise in time to agree the proposals before the end of its mandate.

In an interview, he told EurActiv that he is cooperating with Zalba to ensure that the two proposals progress together, and called for more simplification of language in the proposal. "It is a very technical paper," he said.

Draghi defensa les seves mesures de suport a les pimes davant un Europarlament insatisfet

http://www.elperiodico.cat/ca/noticias/economia/draghi-defensa-les-seves-mesures-suport-les-pimes-davant-europarlament-insatisfet-2918675

 

 El president del BCE afirma que la unió bancària és necessària encara que "no és la panacea" per al creixement.

El president del Banc Central Europeu (BCE), Mario Draghi, ha defensat aquest dijous les mesures de suport a les pimes impulsades per la institució davant un Parlament Europeu (PE) insatisfet amb el paper de l'autoritat monetària a l'hora d'impulsar el crèdit en l'economia real.

"Els interessos de crèdits bancaris per a les llars i les empreses no financeres han baixat i d'aquesta maneraajudem les pimes, espina dorsal de l'economia de la zona euro", ha dit avui Draghi davant un hemicicle que ha passat revista a la gestió dels últims 12 mesos de l'autoritat monetària.

Els grups polítics del PE, així com la mateixa Comissió Europea (CE), representada en el debat pel vicepresident i titular d'Economia, Olli Rehn, han demanat més "ambició" al BCE per injectar més liquiditat a l'economia real, especialment a les petites i mitjanes empreses.

L'eurodiputat espanyol Pablo Zalba (PP) ha dit a Draghi que el BCE "pot i ha de fer més" perquè el crèdit arribi a les petites i mitjanes empreses que "són el motor del creixement i l'ocupació". El vicepresident socialista del PE Gianni Pittela ha animat Draghi a impulsar mesures d'impuls al finançament de les pimes "a l'estil" dels programes de finançament per a préstecs (FLS, sigles en anglès) que ha posat en marxa el Banc d'Anglaterra.

Comissió Europea

"Em semblen que no seran gaire valentes les decisions que prendran els caps d'Estat i de Govern en la cimera de la setmana que ve", ha lamentat en el seu torn de paraula el comissari Rehn, que ha demanat el suport de Draghi per influir en els líders.

Per un altre costat, Draghi s'ha mostrat satisfet per la conclusió aquesta matinada d'un principi d'acord entre les institucions europees per a la directiva de recuperació i resolució bancària, que deixarà fora del pagament de rescats els dipositants de menys de 100.000 euros.

El president del BCE ha confiat que s'avanci en la unió bancària abans del final de la legislatura, encara que ha apuntat que aquest nou marc "no és la panacea" per a l'estabilitat i el creixement econòmic europeu ni per trencar el vincle entre el deute sobirà i la banca. "És necessària, però no suficient per acabar amb el vincle entre deute sobirà i la banca i per retornar Europa a l'estabilitat i el camí de creixement", ha assenyalat.

 

MEPs to demand rewrite of proposal on regulating credit card companies

http://www.europeanvoice.com/article/imported/meps-to-demand-rewrite-of-proposal-on-regulating-credit-card-companies/79025.aspx

 

A draft report before MEPs on 17 December will attack the European Commission's proposal to regulate credit card companies and ask parliamentarians to rewrite much of it.

Pablo Zalba Bidegain, the centre-right Spanish MEP preparing the Parliament's response to the Commission's proposal, is in favour of altering key aspects of the draft legislation, including the proposed price caps and the provision for “co-badging” – allowing card-issuers to place Mastercard and Visa on the same card.

In July 2013, Michel Barnier, the European commissioner for internal market and services, and Joaquín Almunia, the European commissioner for competition, proposed to regulate the fees paid by retailers to banks for each card transaction.

The Commission has been entangled in anti-trust proceedings with Mastercard and Visa since 2000 over concerns that they use their market power to impose unfair prices and conditions on retailers. In his draft report, Zalba describes the Commission's price caps on interchange fees as “completely arbitrary”. He suggests instead that any caps should be based on an average of all EU transaction fees, so as to allow for differences between national markets.

As for the Commission's proposal on co-badging, it “contravenes the most basic principles of competition between brands” and should be scrapped, according to Zalba. Preventing “honour all cards” rules – whereby, for example, Mastercard obliges retailers to accept all Mastercard cards no matter if some are more expensive – would merely see consumers lose confidence in cards and resort to cash, he suggests.

Zalba also proposes extending the Commission's proposal to cover not only card schemes of the type used by Mastercard and Visa, as well as by other credit card companies, but also those employed by American Express and eBay.

One of the few points of agreement between Zalba and the Commission is on the need to allow retailers to acquire their payment instruments from banks in other member states. MEPs in the economic and monetary affairs committee are expected to vote on the draft report in February.

Pablo Zalba spoke at The Economist conference in Cyprus

The Vice-President of the Economic and Monetary Affairs Committee, Pablo ZALBA, was among the distinguish speakers at the Conference of The Economist which was co-organized by the European Parliament Office in Cyprus and the Jean Monnet Chair of the University of Nicosia. MEP P. ZALBA called for the speedy conclusion of the European Banking Union so as to reduce the negative effects of the crisis on the Eurozone. "A basic element of the EU is the principle of solidarity and this should be the compass assisting efforts towards recovery of the economy of Cyprus and other EU countries", he added.

President of the Republic of Cyprus, Nicos Anastasiades, addressing the conference said that Cyprus’ ailing economy is on the mend. In his speech, President Anastasiades presented recent indications for the economy, the positive Troika reviews on the implementation of Cyprus’ adjustment programme, as well as the efforts undertaken by the government to restart the economy.

On his behalf Finance Minister Harris Georgiades said that there is no “deus ex machina” for the Cyprus economy, but the government has made a plan and remains focused and committed on that. IMF representative of the Troika in Cyprus Delia Velculescu prompted the Cyprus government to take advantage of the positive momentum created for the economy and to proceed with the agreed changes, adding that the tough decisions have already been taken.

During the Conference the EPIO in Cyprus promoted the EE2014 with banners and by distributing relative Election 2014 leaflets.

Media wise the conference received thorough and extensive coverage from all Cyprus media (broadcast, press and online), monopolizing a large part of the main evening news bulletins, mainly due to the high-profile speakers in attendance.

Spanish deputy chair of the EP Economic and Monetary Affairs Committee MEP Pablo Zalba (EPP) addressed the event, and his speech was referenced by Politis (press and online), Cyprus Daily, Kathimerini online, Sigmalive.com, and 24h.com.cy – the latter of which dedicated the entire article to the MEP’s speech. All articles noted that Zalba called for the speedy conclusion of a banking union within the European family in a bid to confront its economic woes remarking "We are all in the same boat". Stressing that a banking union would solve all problems long-term and short-term and underlining the important role the European Central Bank could then play, he said that "what's best is to send the message that we are serious about the banking union." A basic element of the EU is the principle of solidarity and this should be the compass assisting efforts towards recovery of the economy of Cyprus and other EU countries, he added. He noted that today the EU faces a problem of funding its enterprises, while he recalled the statement made by former ECB president Jean-Claude Trichet that the Euro is our common fate. He further stated that the government of the Cyprus Republic has recorded exceptional progress under admittedly difficult conditions.

As the event served as a forum for all stakeholders and views to be aired all press and web sources dedicated a considerable number of pages and articles to covering the event and statements of each speaker, with most of Tuesday’s press editorials referring to these statements.

European payments market needs ‘level playing field’

http://www.theparliament.com/latest-news/article/newsarticle/european-payments-market-needs-level-playing-field/#.UpjzRSduGCc

If Europe is to enjoy a truly single market it must first tackle the fragmentation in its payments markets.

The single market is considered one of the primary achievements of the European Union, yet half a century after it was conceived it still features significant gaps that are causing fragmentation and creating obstacles to cross-border activity. Nowhere are these barriers more crucial, but less visible to citizens, than in the EU's dynamic and shifting payments market. The dream is for cross-border payments to eventually become as simple as domestic payments within a member state. Looking at this issue are two key reports currently moving through parliament; one looking at card-based transaction fees and another looking at the EU-wide market for electronic payments.

For Portuguese MEP Diogo Feio, who is rapporteur on electronic payments, it is vital to understand the "differences between the various states of the EU" when looking at the market for transactions. "Some are developed and more modern than others," he explained, adding that "For a Portuguese citizen it is usual to do a payment at an ATM or in internet banking. In other countries this is not the same." In addition to the various methods employed in different member states, there are also "different levels of payments and we need to understand these", said Feio. To properly deal with these diverging methods, he urged policymakers to "think of consumers", adding that "first of all we need a more simple and understandable law". He underlined the need for regulations on ePayments to have "clear and easy rules" and for Europe to move in the "direction of a single payments market". "This is a very important step in line with the internal market," he added.

Fellow EPP deputy Pablo Zalba Bidegain, whose report looks at card-based payments, highlighted the need for a "level playing field for all transactions based on payment cards". For him, this could achieved by setting the same multilateral interchange fees (MIFs) across the entire EU. MIFs, which are collectively agreed inter-bank fees, form part of the fees that payment service providers charge to merchants, who in turn pass the costs onto the consumer.

"One of the problems we face" said the Spanish MEP, "is that market entry for pan-European players remains difficult as interchange fees in EU member states vary a lot between one country and another. New entrants have to offer interchange fees at least comparable to those prevailing in each within the whole European Union will create a level playing field."

The European commission's proposal suggests capping MIFs at 0.2 per cent for debit transactions and 0.3 per cent for credit card transactions. This would represent a significant drop in member states such as Poland, where the fees are around 1.6 per cent, but would be over the 0.1 per cent charged in Denmark. Zalba Bidegain said that parliament wants to be sure that these figures are charged at the correct amount and that they "do not negatively affect consumers". However, when looking at the possibility of an outright ban for MIFs, he said, "I firmly believe in the case of credit cards that banks have the right to charge for that payment because there is a risk linked to that. In the case of debit card operations, although it is not so clear, I think it would make sense to charge something." The capped figures of 0.2 per cent and 0.3 per cent have reportedly been accepted by key players in the payments market, Visa, MasterCard and the French domestic scheme Groupement Cartes Bancaires.

A key issue facing both pieces of legislation is the dynamic and changing nature of the payments market. For Zalba Bidegain it was crucial to ensure that the regulation of these fees was made "futureproof ". "We have to make sure that there are no gaps in the regulation that PSPs can take advantage of," he added. Feio also underlined the importance of recognising "new ways of payment" and the need for any new regulations to be able to "understand and regulate" these novel methods. However, he also made it clear that he felt all different methods of payment "should have the same treatment as much as possible". For the Portuguese rapporteur, new problems such as the protection of data have also arisen through the use of these new methods. "Safety and security of data will be a priority," he said, adding that the protection of systems of payment against fraud" will be a key aspect of his report.

Zalba Bidegain was keen to stress that innovation was a crucial issue for him. "We want companies to go on having incentives in investing in innovation," he said, adding that MIFs have a negative effect on this. This understanding of the negative effect of transaction fees was in part inspired by the May 2012 general court decision against MasterCard, which found that MIFs restrict competition by inflating card acceptance costs, while providing no consumer benefits.

Both rapporteurs wanted to ensure that consideration for consumers was made a central pillar of their reports and ensuring an easy and transparent way of making payments across the EU is key to this aim. For Zalba Bidegain, both reports are inextricably linked in helping make the single market a reality. "We are working very closely on this report with Mr Feio. Same line, same direction, same timing," he said. For Feio the aim was simple "We are building what we need to have a single payments market."