The European Parliament has voted overwhelmingly in favour of a bill to cap the interchange fees charged by card schemes for payments using credit and debit cards.
The European Commission welcomed the outcome, estimating that the rules when implemented could lead to a reduction of about €6 billion annually in hidden fees for consumer cards.
The Regulation, which will come into force in October, will cap interchange fees at 0.2% of the transaction value for consumer debit cards and at 0.3% for consumer credit cards. For consumer debit cards, it also gives flexibility to Member States to define lower percentage caps and impose maximum fee amounts. It additionally addresses licensing issues and other conditions that it says have restricted the freedom of choice of retailers.
In its MasterCard judgment of September 2014, the European Court of Justice made clear that such interchange fees are a violation of EU antitrust rules.
Commissioner Margrethe Vestager, in charge of competition policy, says: "This legislation will put a cap on interchange fees, make them more transparent and remove a hurdle to rolling out innovative payment technologies. It is good for consumers, good for business and good for innovation and growth in Europe. As cards are the most widely used means of online payment, this Regulation is also an important building block to complete the European Digital Single Market."
The legislation was passed by 621 votes to 26, with 29 abstentions.
The new rules will not apply to so-called “three-party” card schemes such as Diners and American Express (involving only one bank) provided the card is both issued and processed within the same scheme. Commercial cards used only to pay business expenses will also be exempt.
After three years, the rules will also apply to three-party card schemes that licence other parties to issue cards and thus circumvent the law by effectively operating as four-party ones.