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.
