An open letter to merchants regarding excessive card fees in Europe

15th February 2018
Brendan Doyle
Brendan Doyle

Visa’s European scheme fees increased as of April 2018, just the latest in a series of significant fee increases that impose higher costs of payments acceptance on merchants. It is expected that further increases are also in the pipeline.

Given that the card schemes now operate on a pan-European scale, and regulation sits with the European Commission, merchants can no longer campaign effectively within national borders. A collective European voice is required and we seek your support in demanding that the Commission investigates these scheme fee increases.

CMSPI has seen first-hand the impact that scheme fee increases can have in the USA. Having applied price increases in the States, the schemes have now turned their attention towards Europe.

In January 2017, Visa increased the percentage element of the fees, affecting those with high average transaction values. This April, Visa’s latest scheme fee increases will affect the per item charge, which will be particularly hard-hitting for smaller ATV merchants, many of whom will see six-figure increases to their merchant service charge (MSC). See below a graph displaying how merchants of differing profiles will be affected by the April 2018 increases.

Overall, CMSPI estimates that average fee increases are between 50-60%, which is an addition to the estimated 30% increase following Visa’s January 2017 announcement. If history is anything to go by, it is likely that more increases will follow.

Figure 1: Visa Scheme Fee Increases – April 2018

We believe these fees are simply tools designed to increase profit, a worrying thought when we consider that both Visa and Mastercard already record profit margins in excess of 50%. Visa and Mastercard continue to add new and amended scheme fees – in Europe and elsewhere – and merchants continue to be offered no protection from this by regulatory bodies or legislation. This needs to change.

Over the coming weeks, we will be working closely with our clients and the European merchant community to gather support to actively oppose the latest scheme fee increases, and to bring these issues to the attention of policymakers and regulators across Europe.

We are asking for your support to challenge this situation. The more merchants prepared to take a stand, the more likely the European Commission will be to listen. Please simply click the button below to register your support, and we will then contact you with an outline of our plans.

Yours sincerely,

Brendan Doyle

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