European Commission Consultation on Inter-Regional Interchange Fees, CMSPI’s Response

Inter-regional fees have been a large burden to merchants for many years, so we are pleased to see the European Commission addressing these issues.

In our consultation response, we highlight the importance of such a review and the material cost saving of €770 million per annum it could have for merchants across Europe. Read more.

4 Key Takeaway Points For Merchants

Inter-regional interchange fees

Great news! The European Commission has recognised that inter-regional fees have been a large burden to merchants for many years, in fact, our analysis suggests that Visa and Mastercard’s commitment to reducing these fees could mean cost reductions of up to €770 million annually for merchants across Europe.

Card Present vs Card Not Present Transactions

Card Not Present transactions have been separated from Card Present transactions in these commitments, and we think it potentially sets a dangerous precedent.

Proposed Time Period

The commitments cover a time period of five and a half years. Although this is substantial, we would have preferred the commitments to be onboarded onto the existing Interchange Fee Regulation (IFR).

Scheme Fees Not In Scope

Worryingly, scheme fees have been excluded from the commitments. Inter-regional scheme fees are more than ten times larger than domestic or intra-regional scheme fees, so by isolating the review to interchange fees, the EC is only addressing part of the problem.