An interchange-free Europe: yes we can!

The commerce sector warmly welcomes the Commission announcement on 6th April of the statement of objections against Visa for their anti-competitive multilateral interchange fees (MIF). Particularly encouraging is the inclusion of the 'honour all cards rule' among the practices which increase the restrictive effects of the MIF. This rule forces merchants, if they accept any brand of card, to accept all such cards no matter how high the hidden interchange costs.

"The Commission's action is a further sign that the interchange fee has had its day," said Xavier Durieu, Secretary General of EuroCommerce. "We urge the Commission to follow this up with swift action against commercial cards and other anti-competitive practices which impose unconscionable interchange fee burdens on retailers and on consumers."

EuroCommerce maintains the view that ad valorem interchange fees, set as a percentage of the transaction value, can never be justified. Studies by banks themselves show that card schemes can be run profitably at a cost of just one euro cent per transaction.

In their recent statement on the MasterCard settlement, the Commission stated that costs of card payments could be calculated vis-à-vis the costs of cash, although this is arguably the least cost-effective way to pay. A far better bench mark would be the existing highly efficient debit card schemes, which run at just 5 euro cents per transaction. In addition, EuroCommerce urges the Commission, in its forthcoming study on the cost of payment means, to establish the true card/cash cost relationship. A recent retail study shows that the true cost of cash is 2 cents per transaction only, far lower than figures alleged by banks.

"We urge the Commission to stand firm by the principles established in the MasterCard decision of December 2007 and to close the door on what Commissioner Kroes herself called a tax on consumers," concluded Durieu. "A Europe-wide card payment system can clearly function at a low price to the benefit of retailers, consumers and, indeed, to the profit of banks. Consumers deserve a Europe in which this is a proven reality."

Established in 1993, EuroCommerce represents the retail, wholesale and international trade sectors in Europe. Its membership includes commerce federations in 31 countries, European and national associations representing specific commerce sectors and individual companies.