The European Parliament voted to cap the fees retailers pay to process debit and credit card transactions on Tuesday, a move which EU officials say will result in lower costs for card users.
The legislation was passed by 621 votes to 26, with 29 abstentions.
The cap will apply to both domestic and cross-border transactions, at 0.2 per cent for debit cards and 0.3 per cent for credit cards. This will mean big savings all round – €6bn a year for retailers and €730m a year for consumers – the European Commission says.
“This legislation, combined with the upcoming Payment Services Directive, will establish a level playing field for payments across Europe,” said Pablo Zalba, who steered the proposal through Parliament, in a release. “It should enhance fee transparency, stimulate competition and enable both retailers and users to choose the card schemes that offer them the best terms.”
Under the new rules, retailers will no longer be obliged to accept all cards at conditions set by card issuers. Retailers choosing a card scheme will only have to accept cards within that scheme that are subject to fee-capping rules.
But critics argue that while the cap may result in savings for retailers, these may not necessarily be passed on to customers. While it expressed hopes that consumers will see savings, European consumer organisation BEUC has called on regulators to “monitor closely if banks do not increase account and services fees to compensate for lost revenues”, the BBC reported.
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