MEPs back cap on card payment fees

European Commission says the rules could save consumers as much as €730m a year.

Members of the European Parliament have voted in favour of capping the fees that retailers charge for processing debit- and credit-card payments.

In a vote today (10 March), they backed plans that it is hoped will save consumers money when making domestic and cross-border transactions. MEPs voted in favour of the deal by 621 to 26.

For cross-border payments with debit cards, they supported a cap of 0.2% of the transaction amount, the same level as for domestic payments. If the rules come into force – after securing support from the member states – EU countries will also be able to set a maximum fixed fee of €0.05 per transaction for smaller, domestic debit-card transactions. When paying by credit card, consumers could be charged 0.3% of the value of the transaction.

Members of the Parliament’s economic and monetary affairs committee had earlier amended a European Commission proposal to cap fees at 0.3%, deciding that debit-card fees should be 0.2% or €0.07, whichever is lower.

Pablo Zalba, a centre-right Spanish MEP who was in charge of steering the legislation through Parliament, said that the laws will create “free transparency and stimulate competition”.

At present, the amount charged varies across the member states.

The European Commission says that the savings for consumers could be as high as €730 million a year. Margrethe Vestager, the European commissioner for competition, said that the rules would “lead to lower prices and visibility of costs for consumers”.

However, there are fears that retailers may simply increase their prices to offset the cost. A spokesperson for BEUC, the European consumers’ organisation, said: “To ensure the savings actually reach consumers we call on regulators to monitor closely if banks do not increase account and services fees to compensate for lost revenues.”

Credit-card companies are concerned about a provision of the law that excludes some card schemes for three years. “Whilst efforts have been made by policymakers towards ensuring equal treatment of all market players, we remain concerned about the negative impact this may have on cardholders due to the regulation’s one-size-fits-all approach,” said MasterCard in a statement.

“We also encourage all member states to respect the principle of equal treatment by ensuring that all schemes remain included in the regulation’s scope, in particular where flexibility is provided for.”