Interchange: Visa Europe compromises on 0.2% for debit card transactions
- The European Commission DG COMP formally adopted the compromise announced in spring 2010 with Visa Europe, which accepted to cap its default interchange fee at 0.2% of the value of transactions for debit card. In response, the DG COMP drops its charges –but still maintains the procedure for credit and deferred debit card transactions.
- This decision concerns cross-border and national transactions when Visa interchanges also apply in agreement with the concerned country's banks (domestic Visa interchange): i.e.: Greece, Hungary, Island, Ireland, Italy, Malta, Sweden, Luxembourg and the Netherlands.
- The Commissioner Joaquin Almunia specifies that “the domestic MIFs in the countries subject to the commitments will be reduced by about 60% on average, while the cross-border MIFs will be reduced by about 30%”.
- In addition, Visa also committed to forbid all unique average price for Merchant Service Commissions and ensure “full visibility and electronic identification of corporate cards” (corporate cards as opposed to consumer cards).
- The agreement concluded in spring has been formalised.
- We now have to wait and see if the Commission will fulfil the wishes expressed last month by the ECB, of a legal instrument to set card interchange general rules. Considering the slow development of third pan-European card scheme projects, a case by case approach cannot provide the required legal security.
- Only sustained political pressure would make it possible to remedy the presence of international schemes, as shown by the recent Indian and Russian projects –as well as by European achievements dating back from the beginning of card industry.
See March-April and November 2010 Watches