The European Commission has today published the long-awaited proposals on the ‘payments package’ of a revised Payment Services Directive (PSD), a Regulation on multilateral interchange fees (MIF) and a communication on SEPA governance.
These proposals are a very significant step to bring competition and transparency into how payments are made and paid for. They should allow retailers to pass savings on to consumers, bringing them real benefits across Europe in these times of hardship. Claims by card schemes that retailers would not pass on cost savings to consumers are nonsensical: price competition and the elimination of inefficiencies are in the DNA of retailers. The proposed MIF caps and other measures will give merchants more control over costs, and consumers choice of payment options. The proposals however falls short of the ideal: merchants had hoped for the abolition of the MIF as a concept, certainly on debit. A move away from percentage fees to flat, cost-based transaction fees would have been more reasonable, especially for debit cards.
Retail also welcomes the measures contained in the revision of the PSD and the communication on SEPA governance. The opening of payments markets to new entrants will significantly improve competition and stimulate innovation. A better balance between payment providers and payment users on governance is also welcome and should ensure fairer long-term decision-making.
We very much welcome:
That the MIF regulation will apply to all consumer card transactions, domestic and cross-border and that it is a per transaction cap. However, the two-year delay for implementation at domestic level will unnecessarily delay the bulk of the consumer benefit from being realised.
The removal of the ‘honour-all-cards’ rule. This will give merchants the freedom of choice to steer consumers away from over-expensive cards.
The ability to operate real cross-border acquiring. This will allow true economies of scale for merchants and should bring card fees down further in the long-term.
The inclusion of third-party payment providers within the PSD. This will inject some much-needed competition into the payments market.
Enabling third-party providers to initiate payments. The ability to access the necessary account information will help innovative players offer cheaper, more efficient services and make full use of technological advances in e-payments.
What could be improved:
The level of caps: we still urge the legislators to reduce the MIF on consumer debit to zero and improve the level on credit. We
The persistence of ad valorem fees: we see no justification for the maintenance of percentage MIFs – especially on debit transactions.
Commercial cards, which carry the highest MIFs, should be covered by the regulation as well.
The European Economic and Social Committee (EESC) was requested to draft an opinion on the proposals issued today by the European Commission. The EESC Bureau appointed GRTU’s Director General and EESC Employers Representative Vincent Farrugia to prepare a report to be approved firstly by the EESC Single Market, Production and Consumption Section (INT) and afterwards presented for voting at the EESC Plenary on the 10th December of this year to be adopted as EESC Opinion.