EU negotiators have reached on initial deal on capping fees for debit and credit card payments across the European Union.
Parliament said today that EU governments and the economic committee of the European Union parliament has agreed on a cap that would apply to cross-border and domestic payments.
The cap should result in lower costs for consumers, Reuters reported.
Interchange fees for card-based payments, paid by the merchant’s bank to the card-issuing bank, differ between EU countries and are not transparent.
The negotiators agreed on a cap of 0.2 per cent of the transaction value of cross-border debit card transactions. EU countries can apply a 0.2 per cent cap to the annual weighted average transaction value of all domestic transactions within the card scheme for domestic transactions.
The agreed cap for credit card transactions is a little higher at 0.3 per cent of the transaction value.
Three-party card schemes such as Diners and American express would be exempt from these rules, providing that the card in question is issued and processed under the same scheme. Commercial cards used for business expenses only would also be exempt under the initial deal.
These caps will not be enforced until six months after the legislation is completed. First, however, the deal needs to be endorsed by EU governments by the Economic and Monetary Affairs Committee, before being put to a vote by Parliament next year.
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