Spanish EPP MEP Pablo Zalba Bidegain is the rapporteur on the proposed regulation on multilateral interchange fees (MIFs) for card-based payment transactions.
Where do the figures of an interchange fee fixed cap of 0.2% for debit cards and 0.3% for credit cards come from?
These figures have been proposed by the Commission, and according to them, they are based on the erchant indifference test (MIT) (1). This is a question that should be posed to the Commission, the European Parliament didn’t fix the caps, so far we have maintained the caps in the report, and we have asked the Commission to provide further proof that these caps are suitable for all the countries.
Does this mean we might see flexibility in the caps on a country by country basis?
Not really with the cap, the targets I want to achieve with this new regulation is to strengthen the single market, so I would prefer 0.2% and 0.3%, but I understand that we have to give flexibility to member states if they want lower caps. My concern is that we want to take into account the different levels of penetration in each country. We wish to incentivise the use of cards in Europe.
Some studies argue that this regulation will benefit big retailers only, and that the consumer will not see any difference in prices. Do you agree with this?
Not really. I think the retail industry in Europe is really competitive and very cost-focused. I believe in the end this will have an impact on prices. It’s true that it will be difficult to see the real impact in the prices, but in the end, I do not hesitate to say that this will have an impact on prices. The worst-case scenario that it has no impact at all, which I do not believe is likely, at least we will have achieved one of the objectives of this new regulation, which is to have more transparency. Consumers will know how much they pay in interchange fees whenever they pay with a credit card.
Certain stakeholder groups advocate a 0% interchange fee across the board. Is this realistic?
This is not realistic for one reason. Every single cash transaction has a cost. Some experts argue that the cost of paying with cash is 0.16% [per transaction]. I am much more in favour of a fixed cap of 0.2% rather than 0%. Again - everything has a cost. I hope that the rate that the Commission has fixed is realistic.
It has been suggested that the proposed definitions of debit cards and credit cards only reflect the definitions used by MasterCard and Visa. Is it realistic to suggest that this could reinforce their perceived duopoly or could put existing European card schemes at risk?
It is true that the definitions can be improved, because as you say they have been based on MasterCard and Visa's definitions. We are trying to improve the definition of a debit and credit card operation to make the legislation clearer. The situation in the member states differs widely. Our aim is to find a formula that could be adapted to all the countries, despite all the differences, and that could be used to clearly define the types of operation at issue.
At the outset, I had four things in mind: transparency, consumer protection, the single market and innovation. We are working together with all the stakeholders to try to balance these four objectives, which are the priorities I want to balance in this report.
(1) The MIT is a methodology developed in economic literature, which was used by the Commission to assess the MIF rates. The fee that meets the requirements in this test ensures that merchants do not pay higher charges than the value of the transactional benefits that card use generates for them.