EU. The Travel Retail Fair Payment Alliance has called for further action on the issue of credit card company fees for retailers, despite Visa’s announcement that it will cap its fees for cross-border debit card transactions at 0.20%. The move came amid pressure from the EU Commission, which is investigating Visa’s fee charging system.
Although the Commission welcomed the reduction, the Fair Payment Alliance called it a “lost opportunity” in the drive to create a competitive market across Europe.
“In particular the announcement avoided decisions on Visa’s Multilateral Interchange Fees (MIF) for consumer credit and deferred debit card transactions, which are included in the ongoing antitrust investigation,” noted the Fair Payment Alliance.
It added: “The Commission was keen to point out that this announcement over Visa’s cross-border debit card transactions did not rule out or prejudice potential proceedings against other rules such as the “˜Honour All Cards Rule’, commercial card transaction MIFs and Inter-Regional MIFs.”
The MIF is a fee agreed between banks, and retailers are campaigning for its abolition.
Visa’s proposed rate cap would bring its MIF in line with last year’s MasterCard settlement with the Commission, which brought fees down to the same level – a move that is good news for travel retail, said the Fair Payment Alliance.
The Alliance said it was analysing the announcement in more detail to determine the next steps. Visa’s proposal must now be “market tested” by the Commission ahead of any formal anti-trust decision. The market test mechanism is unclear, said the Alliance, which is trying to learn more details on stakeholders’ involvement before the Commission arrives at a final decision.
Kappé International Chairman Jacques Parson, who leads the Travel Retail Alliance, said: “Obviously I am pleased retailers’ arguments have led to this announcement to cap Visa Europe’s MIF at 0.20%. It shows how far we have come on this issue. But I have a number of reservations and agree with Xavier Durieu, the Secretary-General of EuroCommerce.
“He said this agreement still “˜retains the notion fees should be a percentage of purchase price when there is no cost justification for this’. This effectively acts as an unfair tax on retailers and their customers: something I feel the Commission should abolish, not agree to.”
