UPDATE: European Commission Responds To MEP Question About Card Fees

September 26, 2023
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The European Commission has responded to a query from a member of the European Parliament (MEP) on card fees and whether they harm merchants’ competitiveness.

The European Commission has responded to a query from a member of the European Parliament (MEP) on card fees and whether they harm merchants’ competitiveness.

Last month, as covered by Vixio, an MEP wrote to the commission to express her concerns about card processing fees in her native Italy. 

"The percentages paid in processing fees for card payment transactions, along with the expense of renting card readers, are driving up operating costs for Italian retailers," wrote MEP Isabella Adinolfi.

Adinolfi, a member of the right-wing Forza Italia party, warned that allowing customers to pay by credit or debit card incurs considerable costs, and is taking a toll on small and medium-sized enterprises (SMEs).

The MEP complained that such fees are blunting Italy’s competitiveness and hindering smaller merchants.

Didier Reynders, European commissioner for justice, responded to Adinolfi with a reference to an EU study on card fees.

"A study commissioned by the Commission on new developments in card-based payment markets will look inter alia at the evolution card payment fees charged by international card schemes,” he said, “including processing fees and whether this resulted in higher merchant service charges."

The study that Reynders is likely referring to was put out for tender in 2022. It goes by the full name: "Study on new developments in card-based payment markets, including as regards relevant aspects of the application of the Interchange Fee Regulation". 

VVA, an Italian consultancy, won the tender, and has been tasked with researching the impact of card fees in the trading bloc, as well as opportunities for innovation, such as co-badging in digital wallets.

The study echoes work being undertaken by the UK’s Payment Systems Regulator (PSR), which has been conducting a market review of card schemes and processing fees since 2021. The PSR intends to publish its interim findings later this year.

According to one source, the commission also expects the results of the VVA study to be published this autumn.

Reynders, a former government minister in Belgium, added that the commission and member states both play a role in overseeing card fees.

"In principle, the relevant Italian competent authorities would be best placed to assess the situation in Italy and consider appropriate action where applicable," he said.

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