Wednesday

26th Apr 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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

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.

Eurogroup makes 'progress' on Greek deal

Eurozone ministers endorsed an agreement in principle between the Greek government and its creditors over a new package of reforms. But talks on fiscal targets and debt could still block a final agreement.

New anti-trust complaint looms over Microsoft

At least three security software companies “met several times” with the European Commission to complain about Microsoft’s alleged abuse of its market position. A formal case could follow.

Commission stops German-British stock merger

The decision to block the merger of the London Stock Exchange and Deutsche Boerse was expected, as negotiations between the parties broke down a few weeks ago.

SMEs lack support in EU financial plan

The European Commission's plan for a capital markets union is said to be aimed at small and medium-sized enterprises, but many could end up being left out in the cold.

New anti-trust complaint looms over Microsoft

At least three security software companies “met several times” with the European Commission to complain about Microsoft’s alleged abuse of its market position. A formal case could follow.

Investigation

MEPs oppose EU agency to prevent Dieselgate II

The European Parliament said on Tuesday that there should be more EU oversight on how cars are approved, but stopped short of calling for an independent EU agency.

News in Brief

  1. EU Commission launches probe into Hungary's university law
  2. Scots slowly losing appetite for independence - poll
  3. Council of Europe puts Turkey on watch list
  4. EU to put parental leave on political agenda
  5. Israel cancels German meeting over human rights groups
  6. Hungary's Orban will participate in EU parliament debate
  7. Malta floats cash-for-refugees plan
  8. Ivanka Trump to meet Merkel at Berlin women's conference

Stakeholders' Highlights

  1. UNICEFRace Against Time to Save Millions of Lives in Yemen
  2. Nordic Council of MinistersDeveloping Independent Russian-Language Media in the Baltic Countries
  3. Swedish EnterprisesReform of the European Electricity Market: Lessons from the Nordics, Brussels 2 May
  4. Malta EU 2017Green Light Given for New EU Regulation to Bolster External Border Checks
  5. Counter BalanceCall for EU Commission to Withdraw Support of Trans-Adriatic Pipeline
  6. ACCAEconomic Confidence at Highest Since 2015
  7. European Federation of Allergy and Airways60%-90% of Your Life Is Spent Indoors. How Does Poor Indoor Air Quality Affect You?
  8. European Gaming and Betting AssociationCJEU Confirms Obligation for a Transparent Licensing Process
  9. Nordic Council of MinistersNordic Region and the US: A Time of Warlike Rhetoric and Militarisation?
  10. European Free AllianceEFA MEPs Vote in Favor of European Parliament's Brexit Mandate
  11. Mission of China to the EUXinhua Insight: China to Open up Like Never Before
  12. World VisionViolence Becomes New Normal for Syrian Children

Latest News

  1. European states still top media freedom list
  2. Let’s not put European public health at risk
  3. Threatened Budapest university calls for EU support
  4. Orban set to face down EU threats
  5. Dont expect 'quick fix' in Syria, China tells EU
  6. Russische schwarze Kassen bedrohen EU Demokratie
  7. Libya commanders in Brussels for migration talks
  8. Mixed review for EU asylum spots in Greece and Italy