EU Is Expected to Propose Capping Interchange Fees
A proposed change in European Union rules could force banks to impose yearly fees of 11 pounds sterling on debit cards and 25 pounds sterling on credit cards, according to opponents of the proposal. The proposal is designed to improve transparency by capping or banning interchange fees that MasterCard and Visa charge to retailers. However, a new MasterCard-commissioned study warns that the loss to card issuers could be 2.4 billion pounds sterling with 2.2 billion pounds sterling in savings for large merchants, but with “no evidence that these savings are passed on to the consumer in lower prices.” Banking costs are an especially sensitive issue in Britain, given how popular free banking is among Britons. Britons typically pay nothing for basic banking functions because the cost is largely covered by the banks imposing higher overdraft charges and penalty fees elsewhere. Visa Europe has tried to counter legislation by promising to charge no more than 0.3 percent of a retail transaction for credit card interchange fees, but the European Commission says this would only cut the charges by between 40 pence and 60 pence.
From “EU Rule ‘Could Force 11 Pounds Sterling Debit Card Charge on Britons'”
London Telegraph (United Kingdom) (07/02/13) Oxlade, Andrew