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| European Union Aims to Lower Credit Card Fees | European Union Aims to Lower Credit Card Fees |
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| BRUSSELS — European Union officials on Wednesday proposed ways of lowering the fees that consumers do not see, but ultimately pay, for using credit card services like Visa and MasterCard. The proposal is meant to give the retail sector a shot in the arm. | BRUSSELS — European Union officials on Wednesday proposed ways of lowering the fees that consumers do not see, but ultimately pay, for using credit card services like Visa and MasterCard. The proposal is meant to give the retail sector a shot in the arm. |
| But the proposal is expected to face heavy opposition from the card companies and from other financial services companies. The measures are aimed at so-called interchange fees — behind-the-scenes fees incurred whenever consumers tap in their PIN codes or sign a credit card receipt. | But the proposal is expected to face heavy opposition from the card companies and from other financial services companies. The measures are aimed at so-called interchange fees — behind-the-scenes fees incurred whenever consumers tap in their PIN codes or sign a credit card receipt. |
| The rules would also limit the surcharges imposed by some merchants on card payments for purchases, in particular airline tickets. Such sums can reach levels of around 12 euros, or about $16, on top of an individual purchase, according to commission officials. | The rules would also limit the surcharges imposed by some merchants on card payments for purchases, in particular airline tickets. Such sums can reach levels of around 12 euros, or about $16, on top of an individual purchase, according to commission officials. |
| The officials said that the measures were necessary to stop the gouging of consumers by the operators of payment systems that are vital for e-commerce and a thriving retail sector, and to make it easier for Europeans to make purchases across national borders. Officials also said the measures could encourage new companies to enter the bank card market. | The officials said that the measures were necessary to stop the gouging of consumers by the operators of payment systems that are vital for e-commerce and a thriving retail sector, and to make it easier for Europeans to make purchases across national borders. Officials also said the measures could encourage new companies to enter the bank card market. |
| “The interchange fees paid by retailers end up on consumers’ bills,” said Joaquín Almunia, the European Union’s commissioner for competition policy, referring to the fees paid by banks to one another for each card payment. | “The interchange fees paid by retailers end up on consumers’ bills,” said Joaquín Almunia, the European Union’s commissioner for competition policy, referring to the fees paid by banks to one another for each card payment. |
| “Not only are consumers generally unaware of this — they are even encouraged through reward systems to use the cards that provide their banks with the highest revenues,” he said. | “Not only are consumers generally unaware of this — they are even encouraged through reward systems to use the cards that provide their banks with the highest revenues,” he said. |
| Peter Ayliffe, the president of Visa Europe, said in a statement that the proposals would be “detrimental to the innovation that will support European economic growth.” He also complained that proposals mostly exempted American Express and a number of providers of e-commerce and mobile payment systems. | |
| About 9 percent of fees charged by American Express would be covered by the new rules, according to the commission. | |
| MasterCard said in a statement on Wednesday that it would cooperate with the commission to make the payment systems in Europe more secure and efficient, but it said the proposals would have unforeseen and negative consequences. | |
| The cap on fees “will actually harm and inconvenience consumers and small merchants” and will “hinder competition and innovation in the European payments landscape,” said Javier Perez, president of MasterCard Europe. | The cap on fees “will actually harm and inconvenience consumers and small merchants” and will “hinder competition and innovation in the European payments landscape,” said Javier Perez, president of MasterCard Europe. |
| Michel Barnier, the bloc’s commissioner in charge of financial services, said Wednesday that MasterCard, in particular, had engaged in “extraordinary and unheard-of lobbying” aimed at opposing the measures. Mr. Barnier, speaking at a news conference with Mr. Almunia, insisted that the proposals “will not create supplementary difficulties for consumers.” | Michel Barnier, the bloc’s commissioner in charge of financial services, said Wednesday that MasterCard, in particular, had engaged in “extraordinary and unheard-of lobbying” aimed at opposing the measures. Mr. Barnier, speaking at a news conference with Mr. Almunia, insisted that the proposals “will not create supplementary difficulties for consumers.” |
| The European Commission, the executive agency that also serves as the Union’s consumer watchdog, has long suspected the major card companies and banks of overcharging, hurting retailers and consumers. | The European Commission, the executive agency that also serves as the Union’s consumer watchdog, has long suspected the major card companies and banks of overcharging, hurting retailers and consumers. |
| The rules would limit banks to charging 0.2 percent on the value of a debit card transaction and 0.3 percent on credit cards. That is important, according to commission officials, because card companies like Visa and MasterCard have, in the past, partly competed on the size of the fee that banks collect in exchange for those banks issuing their cards to consumers. | |
| The rules would apply to transactions across borders in the European Union as soon as the law goes into force. But there would be a 22-month transition period before they went into effect for domestic transactions, which represent the vast majority of payments. | |
| The proposal would need approval by the European Parliament and by a majority of European Union member states before becoming law. |