EU Votes to Include Commercial Cards in Interchange Fee Limits

The European Parliament voted earlier this month to include commercial credit cards in their new statutory limits on credit card interchange fees.

Previously the proposal would've applied the limits only to consumer cards, but the Parliament's Economic and Monetary Committee (ECON) removed the exemption for commercial credit cards in February. The European Commission had representatives recommending that the exemption be added back into the proposal, but the Parliament adopted ECON's original revisions. The European Union Council of Ministers, which represents individual member states, also has to approve the regulation before it becomes law, but if it does, merchants in the EU accepting payments on a commercial credit card would see their fees capped at 0.3%.

Card networks warned corporate users that the regulation, should it ever enter into force with the commercial credit card interchange limits intact, could lead to greater fees in other forms as banks make up for the estimated 6 billion in euros that the new rules would cost them.

"MasterCard is concerned that today's vote in the European Parliament is bad news for consumers and small businesses in Europe," said the company in a statement. "While the idea of capping fees may be politically attractive, it makes little sense if consumers and small businesses end up paying more for their cards."

The EU has taken an especially strict approach to regulating the way card networks charge interchange fees, and has historically been more rigorous in its enforcement of antitrust regulations in general. Officials in the EU have repeatedly accused Visa and MasterCard, which collectively control more than 95% of the European market in terms of value, of anti-competitive behavior and that the fees themselves artificially increase prices for users.

- Jacob Barron, CICP, NACM staff writer

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