Payment card schemes shall not impose reporting requirements, obligations to pay fees or similar obligations with the same object or effect on card issuing and acquiring payment service providers for transactions carried out with any device on which their payment brand is present in relation to transactions for which their scheme is not used. Excessive merchant fees might otherwise arise due to the collective interchange fee arrangements, as merchants are reluctant to turn down costly payment instruments for fear of losing business. Payment cards are the most frequently used electronic payment instrument for retail purchases. Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114(1) thereof. Contracts between acquirers and payees may include a provision that the information referred to in the first subparagraph of paragraph 1 shall be provided or made available periodically, at least once a month, and in an agreed manner which allows payees to store and reproduce information unchanged. To make the levels of interchange fees more consistent, a further introduction of regulatory measures at national level aimed at addressing the levels of, or discrepancies between, those fees is anticipated. It thereby stimulates the use of efficient payment instruments through the promotion of those cards that provide higher transactional benefits, while at the same time preventing disproportionate merchant fees, which would impose hidden costs on other consumers. Interchange fee regulation Published 27 July 2015 Last updated 8 October 2015 — see all updates. Interchange fees are a main part of the fees charged to merchants by acquiring payment service providers for every card-based payment transaction. All debit and credit card-based payment transactions should be subject to a maximum interchange fee rate. Eliminating direct and indirect obstacles to the proper functioning and completion of an integrated market for electronic payments, with no distinction between national and cross-border payments, is necessary for the proper functioning of the internal market. 9. It should not prevent Member States from maintaining or introducing lower caps or measures of equivalent object or effect through national legislation. 6. By 9 June 2019, the Commission shall submit a report on the application of this Regulation to the European Parliament and to the Council. The Interchange Fees Regulation will bring significant benefits for consumers and retailers, notably by reducing the costs of card payments. The Regulation stipulates that the interchange fee imposed on debit card transactions cannot exceed 0.2% of the value of the transaction while the interchange fee imposed on credit card transactions cannot exceed 0.3% of the value of the transaction. The issuer makes payment cards available to the payer, authorises transactions at terminals or their equivalent and may guarantee payment to the acquirer for transactions that are in conformity with the rules of the relevant scheme. 3. It is therefore important to define a commercial card as a payment instrument used only for business expenses charged directly to the account of the undertaking or public sector entity or the self-employed natural person. § 1693o-2, that requires the Federal Reserve to limit fees charged to retailers for debit card processing. In November 2014, Visa and Mastercard separately committed to voluntarily reduce their interchange fees, which businesses are charged for the use of their cards. 5. A payment service provider can be an issuer or an acquirer or both; ‘payment service user’ means a natural or legal person making use of a payment service in the capacity of either payer or payee, or both; ‘payment transaction’ means an action, initiated by the payer or on its behalf or by the payee of transferring funds, irrespective of any underlying obligations between the payer and the payee; ‘processing’ means the performance of payment transaction processing services in terms of the actions required for the handling of a payment instruction between the acquirer and the issuer; ‘processing entity’ means any natural or legal person providing payment transaction processing services; ‘point of sale’ means the address of the physical premises of the merchant at which the payment transaction is initiated. In relation to the interchange fee cap calculated on the annual average transaction value within one payment card scheme, it is sufficient that a payment service provider participates in a payment card scheme (or some other type of agreements among payment service providers) in which, for all domestic debit card transactions, a weighted average interchange fee of no more than the 0,2 % is applied. However, until 9 December 2018 in relation to domestic payment transactions, such a three party payment card scheme may be exempted from the obligations under Chapter II, provided that the card-based payment transactions made in a Member State under such a three party payment card scheme do not exceed on a yearly basis 3 % of the value of all card-based payment transactions made in that Member State. Acquirers shall include in their agreements with payees individually specified information on the amount of the merchant service charges, interchange fees and scheme fees applicable with respect to each category and brand of payment cards, unless the payee subsequently makes a different request in writing. The Payment Card Interchange Fee and Merchant Discount Antitrust Litigation is a United States class-action lawsuit filed in 2005 by merchants and trade associations against Visa, MasterCard, and numerous financial institutions that issue payment cards. 1. Payment card schemes and payment service providers shall not apply any rule that obliges payees accepting a card-based payment instrument issued by one issuer also to accept other card-based payment instruments issued within the framework of the same payment card scheme. Having regard to the opinion of the European Central Bank (1). This should help merchants negotiate a better deal with their banks. Taking into account the need to preserve the functionality of the existing business models while avoiding unjustified or excessive costs of legal compliance and, at the same time, considering the importance of ensuring an adequate level playing field between the different categories of payment cards, it is appropriate to apply the same rule provided by this Regulation for the debit card transactions to such domestic ‘universal cards’ payment transactions. In addition, to ensure that debit card fees are set at an economically efficient level, taking into account the structure of domestic debit card markets, the possibility to express interchange fee caps as a flat rate should be maintained. Choice and availability of payment methods, Access to cash during Covid-19: identifying and managing temporary gaps in provision, Update on our work supporting cash access during the COVID-19 pandemic, Market review into the supply of card-acquiring services, Getting the right outcomes for the victims of APP scams, Infographic - Our work protecting people from Authorised Push Payment (APP) scams, Payment Card Interchange Fee Regulations 2015, 12 Endeavour Square, Stratford, London E20 1JN. (3) Position of the European Parliament of 10 March 2015 (not yet published in the Official Journal) and Decision of the Council of 20 April 2015. 4. To avoid this, the ‘net compensation’ of fees paid or received by the issuer, including possible authorisation charges, from or to a payment card scheme, an acquirer or any other intermediary should be considered as the interchange fee. The report has the biggest interchange structural changes that we’ve seen in a decade. Secure, efficient, competitive and innovative electronic payments are crucial if consumers, merchants and companies are to enjoy the full benefits of the internal market, especially as the world moves towards e-commerce. First of all, the capping of interchange fees should result in lower fees charged by banks to retailers for processing card payments. The competent authorities may require that such information is certified by an independent auditor. Payment card schemes and processing entities: shall be independent in terms of accounting, organisation and decision-making processes; shall not present prices for payment card scheme and processing activities in a bundled manner and shall not cross-subsidise such activities; shall not discriminate in any way between their subsidiaries or shareholders on the one hand and users of payment card schemes and other contractual partners on the other hand and shall not in particular make the provision of any service they offer conditional in any way on the acceptance by their contractual partner of any other service they offer. Isabelle Clairac (Carrefour), chairwoman of the EuroCommerce Payments Committee, represented the retail sector
Ahead of the hearing, EuroCommerce had written to DG COMP and members of the Vestager cabinet to highlight the findings of a study undertaken on our behalf by … 4. It is necessary that any limitation on the use of a given brand be announced by the payee to the payer at the same time and under the same conditions as the information that a given brand is accepted. This prohibition shall also cover any rule prohibiting payees from treating card-based payment instruments of a given payment card scheme more or less favourably than others. They shall notify the Commission without delay of any subsequent change concerning those bodies. On the basis of the separation of scheme and infrastructure, card schemes and processing entities should be independent in terms of accounting, organisation and decision-making process. Any rule in licensing agreements, in scheme rules applied by payment card schemes and in agreements entered into between card acquirers and payees preventing payees from informing payers about interchange fees and merchant service charges shall be prohibited. Any requirement or obligation to obtain a country specific licence or authorisation to operate on a cross-border basis or rule with an equivalent effect in licensing agreements or in payment card scheme rules for issuing payment cards or acquiring card-based payment transactions shall be prohibited. Payment card schemes shall allow for the possibility that authorisation and clearing messages of single card-based payment transactions be separated and processed by different processing entities. Any routing principles or equivalent measures aimed at directing transactions through a specific channel or process and other technical and security standards and requirements with respect to the handling of two or more different payment brands and payment applications on a card-based payment instrument shall be non-discriminatory and shall be applied in a non-discriminatory manner. Consumers tend to be unaware of the fees paid by merchants for the payment instrument they use. Visa sent a document that outlined the proposal to banks. 2. (7) Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council (OJ L 304, 22.11.2011, p. 64). An interchange fee is paid from a merchant’s bank (called an acquirer) to a card user’s bank (called an issuer) for most transactions when a card payment is made (except for American Express cards) – for example, when somebody buys groceries from a supermarket using their card. The Commission should present a report studying various effects of this Regulation on the functioning of the market. After the execution of an individual card-based payment transaction, the payee's payment service provider shall provide the payee with the following information: the reference enabling the payee to identify the card-based payment transaction; the amount of the payment transaction in the currency in which the payee's payment account is credited; the amount of any charges for the card-based payment transaction, indicating separately the merchant service charge and the amount of the interchange fee. 2. 6. 2. The EU rules impose a cap of 0.2% of the transaction value for consumer debit cards, and 0.3% for credit cards. However, integration of the Union payment card market is far from complete as many payment solutions cannot develop beyond their national borders and new pan-Union players are prevented from entering the market. 1. Contact us | Any territorial discrimination in processing rules operated by payment card schemes shall be prohibited. 3. The report by the Commission shall, if appropriate, be accompanied by a legislative proposal that may include a proposed amendment of the maximum cap for interchange fees. 1. Those restrictions should be abolished. Therefore, by way of exception and during a transition period of 18 months after the entry into force of this Regulation, Member States should be able to define a maximum share of domestic ‘universal cards’ payment transactions which are considered as being equivalent to credit card transactions. 2. 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