EU wants to cut credit card fees

european-commissionThe EU is looking for ways to help the retail sector and one of its tools could be a new cap on credit card fees. Although the European Commission has a chequered record in such matters, the new plan appears to resemble the EC’s roaming caps, which were a success.

At the moment there is little to no legislative harmonisation among member states, hence Denmark has no debit card fees, while Poland has a 1.6 percent fee. Furthermore credit card transactions in some countries cost three times as much as debit card transactions. French consumers pay an 0.5 percent fee on credit card transactions, but just across the border Germans pay up to 1.8 percent, reports Euronews.

If the proposals go through, credit card fees will be capped at 0.3 percent, while debit card fees will be capped at 0.2 percent. With an EU-wide cap in place, cross-border trail should also benefit and this is obviously good news for e-commerce outfits.

European Commissioner responsible for internal market and services, Michel Barnier, said interbank fees don’t correspond to real cost for big players like Mastercard and Visa.

“Besides, in many countries where those fees are regulated or limited, it’s less expensive to make payments with cards, for the retailer as well as the consumer,” he said.

However, although consumers will welcome the proposal, the financial sector will probably go ape and try to find alternative ways of making up for lost revenue, i.e. they might start charging annual fees.