Sunday

23rd Jul 2017

Credit card company fears commission move

  • Visa - argues the payments are needed to help consumers (Photo: Lotus Head)

The European arm of the world's largest credit-card company has said banning transaction charges would harm consumers and destroy a European Union revamp of payment systems.

Visa Europe is seeking to sway Neelie Kroes – the EU competition commissioner - who will present the final result of her investigation into the payment-card industry on 31 January.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

Peter Ayliffe – the head of Visa Europe - told journalists in Brussels on Monday (15 January) that he fears Europeans will stop using payment cards unless the European Commission lets card companies keep setting the rates banks charge for credit-card transactions.

The credit-card companies do not get any money from the fees, but can use their ability to set the fees to influence banks to distribute their particular card to bank customers.

But retailers have complained that the fees are too high and unclear, which led to the commission launching the investigation in June 2005.

The retailer's bank pays the card issuer's bank an "interchange" fee - a percentage of each purchase - to process card-based transactions.

The commission already in 2002 forced Visa, in a settlement that expires this year, to revise the way it sets the fees and questioned the need for the interchange fees in an interim finding last April.

Back then, Ms Kroes expressed concern about a lack of competition in the sector and "scandalous" profits earned on payments cards.

"You cannot run a payment system without some level of interchange," Mr Ayliffe said, according to Bloomberg.

"The danger is that mis-placed intervention by regulators leads to the end of cards for all, as costs for consumers will undoubtedly increase," he explained, according to AFP.

Ms Kroes' spokesman, Jonathan Todd, said on Monday that all industry comments would be taken into account.

"It is legally possible for the European Commission to require a system to be abolished if it's in violation of competition rules," he told journalists in Brussels, but added that he was "not saying that we are going to get rid of interchange fees."

Nearly 321 million cards have been issued by banks in Europe using Visa's system, accounting for 1 in every 9 euros spent or €1.2 trillion a year, Reuters reports.

EU commission takes aim at credit card fees

Mastercard was in the EU's line of fire on Wednesday, after the bloc's internal market chief accused the credit-card giant of waging a "mad" lobbying campaign against plans to cap fees.

Greece to get €7.7bn loan next week

The ESM, the eurozone emergency fund, agreed on Friday to unblock a new tranche of aid as part of the bailout programme agreed upon in 2015.

EU and Japan agree on free trade

Japanese prime minister and EU leaders to endorse major trade deal on Thursday in anti-protectionist message to Trump.

EU and Japan closing in on trade deal

[Updated] The EU and Japan edge closer to securing a free trade deal on Thursday, ahead of the G20 summit at the end of the week where US protectionism will be an issue.

Opinion

Greece needs a new plan

Two years into its third bailout, Greece needs to combine the necessary fiscal targets with a new vision. This can be done in the context of the ongoing industrial revolution.

Opinion

Ceta and pesticides: A citizens' rights issue

The trade agreement with Canada will begin to apply on 21 September. But there is still a potential conflict on the right to data protection vs. the right to access information.

News in Brief

  1. Polish parliament adopts controversial justice reform
  2. GMO opt-out plan unlikely to go anywhere in 2017
  3. Slovak PM threatens to boycott inferior food
  4. France takes Google's 'right to be forgotten' to EU court
  5. Turkey accuses German companies of supporting terror
  6. Israel's Netanyahu caught calling EU 'crazy'
  7. UK does not collect enough data to expel EU nationals
  8. Polish president threatens to veto justice reform

Stakeholders' Highlights

  1. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  2. ACCAAnnounces Belt & Road Research at Shanghai Conference
  3. ECPAFood waste in the field can double without crop protection. #WithOrWithout #pesticides
  4. EU2017EEEstonia Allocates €1 Million to Alleviate Migratory Pressure From Libya in Italy
  5. Dialogue PlatformFethullah Gulen's Message on the Anniversary of the Coup Attempt in Turkey
  6. Martens CentreWeeding out Fake News: An Approach to Social Media Regulation
  7. European Jewish CongressEJC Concerned by Normalisation of Antisemitic Tropes in Hungary
  8. Counter BalanceOut for Summer Episode 1: How the EIB Sweeps a Development Fiasco Under the Rug
  9. CESICESI to Participate in Sectoral Social Dialogue Committee on Postal Services
  10. ILGA-EuropeMalta Keeps on Rocking: Marriage Equality on Its Way
  11. European Friends of ArmeniaEuFoA Director and MEPs Comment on the Recent Conflict Escalation in Nagorno-Karabakh
  12. EU2017EEEstonian Presidency Kicks off Youth Programme With Coding Summer School

Latest News

  1. Dutch coalition talks lengthiest in 40 years
  2. Polish parliament steps up showdown with EU
  3. EU urges UK to clarify its Brexit positions
  4. Law expert: direct EU powers have become too complicated
  5. Winter is here for Spitzenkandidat, but he'll survive
  6. Mafia money pollutes the EU economy
  7. Central Europe should be wary of Brexit stopping
  8. Poland's 'July coup' and what it means for the judiciary