Tuesday

26th Jul 2016

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 to tweak rules on Chinese 'dumping'

The EU Commission has tried to fudge the issue of whether China is a “market economy” amid efforts to protect European industry from cheap exports.

Court ruling puts Renzi bank plan in doubt

EU court ruling on bank bailouts has raised the likelihood of a political embarrassment for Renzi, months before a referendum puts his future and, potentially, Italy’s euro future on the line.

Stakeholders' Highlights

  1. Belgrade Security ForumMigration, Security and Solidarity within Global Disorder: Academic Event 2016
  2. GoogleHow Google Fights Piracy: Creating Value While Fighting Piracy
  3. EJC"My Visit to Israel" - Opinion by MEP Lopez Aguilar, Chair of the EP Working Group on Antisemitism
  4. World VisionChildren Migrating, Out of School and at Work as Hunger Deepens in Southern Africa
  5. European Healthy Lifestyle AllianceStand-Up (and Exercise) to Prevent Chronic Diseases
  6. Centre Maurits CoppietersLaunches a Real-time News Hub Specialised in EU Stakeholders
  7. Dialogue PlatformFethullah Gulen Calls for International Probe Into Turkey Coup Allegations
  8. GoogleEU-US Privacy Shield: Restoring Faith in Data Flows and Transatlantic Relations
  9. World VisionWorld Leaders & Youth Advocates Launch Partnership to End Violence Vs. Children
  10. Counter BalanceReport: Institutionalised Corruption in Romania's Third Largest Company
  11. Access NowEuropol Supports Encryption. We Can Relax Now… Right?
  12. GoogleLearn about Google's projects across Europe on Twitter @GoogleBrussels