Large retailers including Ikea, Tesco and Amazon have voiced their complaints to the European Union regulators that card acceptance fees, which are regulated in the EU, have in fact been increasing. While interchange is capped, there are other fees beyond interchange that can be charged and are outside the confines of the regulation. The networks also introduce new products that merchants may buy, increasing their overall processing costs.
Bloomberg has this to say about the matter:
EuroCommerce, an industry group that represents 6 million retailers, said card companies “have been steadily increasing the unregulated fees imposed on” stores. It wants the European Commission to widen the existing rules to cover other card transactions. It’s also asking for “strong and dissuasive penalties” if card firms don’t comply.
“Other fees have substantially increased, as have fees for unregulated cards, which most merchants have no choice but to accept,” EuroCommerce said in an emailed statement on Thursday.
Visa Inc. and MasterCard Inc. ended nearly two decades of EU antitrust scrutiny with a settlement last year. Interchange fees, a payment made between retailers’ and consumers’ banks as part of card transactions, were a target of antitrust investigations before the EU drafted a law to cap the fees.
Visa said that a recent report commissioned by the EU found that the cost of card acceptance for retailers has decreased significantly in recent years. “In line with these findings, Visa does not believe a revision of the legislation is needed at this time,” the company said in a statement.
Overview provided by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group.
