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European Commission - Statement

Commission welcomes political agreement reached by European Parliament and Council on capping inter-bank fees for card-based payments

Strasbourg, 17 December 2014

The European Commission welcomes the political agreement reached today by the European Parliament and the Council on the Commission proposal for a Regulation on Interchange Fees for Card-based Payment Transactions.

The Regulation intends to introduce maximum fees for consumer debit and credit cards, makes it possible for retailers to accept only consumer cards, and establishes transparency rules for all transactions.

Today, consumers 'pay for paying' with cards through hidden inter-bank fees that banks impose collectively on retailers ('interchange fees'). Retailers in turn pass these costs on to consumers, leading to higher prices. Neither retailers nor consumers can influence these fees. In its MasterCard judgment of 11 September, the European Court of Justice made clear that such interchange fees are a violation of EU antitrust rules.

Besides capping fees and increasing transparency, the Regulation removes major obstacles to technological innovation. Technologies allowing online, mobile and person-to-person transactions on the basis of card payments are readily available. However, uncertainty on permissible interchange fees and business rules has so far held up its roll out to EU consumers. The Regulation helps provide legal certainty to the industry and a level playing field for all payment providers.

Commissioner in charge of competition policy, Margrethe Vestager, said: "This legislation is good for consumers, good for business, and good for Europe. It will lead to lower prices and visibility of costs for consumers. It reduces a 'tax' levied on business by banks in the form of interchange fees, and releases the brakes that have so far held back innovation. I would like to thank the European Parliament – especially the Rapporteur Pablo Zalba and the shadow rapporteurs – and the Italian Presidency for their commendable work on this file."

Commissioner for Financial Stability, Financial Services and Capital Markets Union Jonathan Hill said: "Thanks to the adoption of this Regulation, we have taken a big step towards a Single Market in card payments and towards a new generation of fast, convenient and user-friendly payment technologies. It will cut the cost of payments substantially for merchants, especially SMEs and that in turn should lead to a fall in consumer prices. And it offers banks a stable and sustainable business."

The legal text still needs to be formally approved by the European Parliament and Council, which is expected in early 2015.


The current variety of inter-bank fees between EU countries, indirectly charged to retailers by cardholders' banks when a cardholder uses his card, is difficult to justify and has hindered integration and innovation of the EU payments market.

The Commission and national competition authorities have condemned these hidden fees under the European competition rules; the Commission set out its analysis of such fees in its 2007 decision on MasterCard's multilateral interchange fees (MIFs) for cross border consumer card transactions. In September 2014, the European Court of Justice confirmed that assessment. During the appeal proceedings Council and Parliament worked on legislation creating clarity on fee models and business rules and facilitating market entry by non-banks on the basis of two Commission's proposals: a proposal for a Regulation on Interchange Fees for card based payments and a proposal to revise the Directive on Payment Services (“PSD”). 

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