In a move designed to bolster competition and create greater transparency in the Single Euro Payments Area (SEPA), MasterCard Europe has today announced SEPA fall-back interchange rates for Maestro point-of-sale (POS) transactions intended to be effective from 1 January 2008.
"The SEPA rates support MasterCard's overall SEPA strategy and represent the final step towards Maestro's SEPA Cards Framework compliance," said Javier Perez, President, MasterCard Europe. "The rates are designed to promote - over time - convergence to a single interchange rate structure across the Euro Zone, in line with the objective as set out recently by the European Central Bank."
"Our new Maestro interchange rates are part of our overall SEPA strategy to support European banks in the creation of a competitive, transparent and innovative Single Euro Payments Area," continued Perez. "We believe these rates are not only competitive, but - along with other key elements of MasterCard's SEPA strategy - will encourage the continuing replacement of cash with electronic payments and promote the reduction of fraud through the latest chip technology."
With these new rates and increased competition resulting from the introduction of a Maestro four-party model it is anticipated that total costs to merchants for SEPA transactions will come down, on average, across the SEPA region over time. A four-party SEPA model opens up the market to new entrants, leading to competitive offers on all major cost items for merchants such as the merchant service charges (MSC), terminals and telecommunications.
In particular, for cross-border Maestro POS transactions, the fall-back interchange rates are significantly reduced versus current intra-EEA cross-border rates. For a typical transaction of 50 euros, the new Maestro SEPA interchange rates will be between 9 and 20 euro cents - as compared with the current Maestro intra-EEA interchange rates of 25 to 59 euro cents.
The new rates are part of the evolution of Maestro to a true SEPA product based on a SEPA four-party model designed to drive benefits for all parties in a payment transaction, including:For consumers:
- increased international acceptance of their cards
- a common debit card experience across Europe
- more innovative card products and solutions
- enhanced competition for card acceptance services - driving increased efficiencies and increasing value, particularly to small and medium size merchants
- increased standardisation - helping to reduce technology costs such as terminals
- greater innovation - increasing the payment options available to merchants (such as offline authorisation for low-value payments)
- reduction of rates as compared to current intra-European rates
- additional cost savings through pan-European acquiring.
- access to a larger card base
- the ability, over time, to consolidate international card processing activities onto common platforms - reducing costs with increased efficiencies
- innovative debit products to support competitive advantage in the market-place, and
- the ability to expand business across all countries in the Euro Zone.
The SEPA fall-back interchange rates will apply to Maestro euro transactions within and/or between Euro Zone countries. In some countries, domestic interchange rates may differ initially based on local arrangements. MasterCard Europe will monitor future market and regulatory developments in order to ensure that Maestro remains an attractive SEPA payment alternative for consumers, merchants and banks.
"MasterCard believes that the best model for payments in Europe is a SEPA four-party model because it enables multiple issuers and acquirers to compete for the business of merchants and consumers across the Euro Zone, helps create a consistent cardholder and merchant experience, encourages innovation, and promotes greater efficiency, transparency and choice," concludes Perez.