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New recitals drafted for the Payment Services Regulation (PSR) maintain the momentum for greater card fee transparency in the EU, according to documents seen by Vixio.
The documents show that like the UK, the EU could soon have stricter oversight of card fee transparency, in what will likely be seen as a victory for merchants.
According to a Polish presidency working paper, most member states are supportive of expanding transparency requirements to include the total cost of acceptance, broken down into acquirer margin, scheme fees and interchange fees.
Although some have noted that transparency is already addressed in the Interchange Fee Regulation (IFR), there is a general agreement that the PSR could be used to introduce additional obligations, particularly regarding information flows between card schemes and acquirers.
The Polish presidency argues that because the IFR contains no obligation for schemes to disclose the scheme fees and rules they charge to acquirers in a transparent manner, it is essential that there is more transparency.
It suggests this is desirable from the perspective of the payments industry, and is also in the interests of payments users such as merchants.
To ensure greater transparency, the documents propose enabling secondary legislation from the PSR to be developed by the European Banking Authority (EBA).
If the Council amendment goes through, then the EBA would be mandated to create regulatory technical standards (RTS) to specify the criteria for what constitutes a transparent and consistent disclosure of fees and rules.
Meanwhile, card schemes would need to make transparent their card fees six months prior to implementation. This information would need to be provided to payment service providers (PSPs) that are issuing or providing acquiring services or payment services to payment service users.
Another recital suggested by the Council binds the European Commission to release a report on the evolution of card fees every two years.
This would cover the capacity of issuers and acquirers to negotiate new rules and fees proposed by payment card schemes, and the competitive behaviour of the payment card schemes in the acquiring and issuing markets.
Joint letter calls for action
This presidency paper comes at the same time as renewed action from the merchant industry, revealing merchants' growing frustration with a lack of action being undertaken by the regulators regarding card fees.
A letter seen by Vixio has been signed by trade associations representing both retailers and payments firms in the EU, and calls for action to address what they suggest are high costs due to the dominance of the card schemes in the EU.
Among their calls to action is a push for more transparency via the PSR, and a call for a review into the IFR, outlining the need for price controls regarding scheme fees.
