The Fee Limits

The new rules amount of those fees will be limited to 0.3% for credit card payments and 0.2% for debit card transactions. The ceiling of 0.2% for debit cards initially will apply only to cross-border payments with them, and after a five-year transitional period will enter into force for domestic payments. During this period, however, Member States may restrict the fees and domestic payments to 0.2%, or 0.05 cents for smaller transactions. Countries can adopt and lower ceilings established by 0.3% on credit card payments.

“This legislation, combined with the forthcoming Directive on Payment Services, will create equal conditions for payments in Europe,” said Spanish MEP from the EPP Pablo Sabre, which is importing the proposal in Parliament. In his words, the new rules should improve the transparency of the charging and stimulate competition between different payment schemes in the market.

These include Visa and MasterCard, which according to MEPs hold a total of 96.8% of the market. They are representatives of the so-called. quadrilateral card schemes – they participate in the bank, card issuer, the merchant’s bank, merchant and cardholder himself. Unlike them, the so-called. triangular card schemes, such as Diners and American Express, involving only one bank and payment card issued and processed within the same scheme. For an initial period of three years the new rules will not apply to tripartite schemes specified by the EP. The new legislation will not apply the so-called. Corporate cards are used for payment of business expenses. The ceiling does not affect the charges and withdrawal of cash from ATMs. Expectations of the Commission are the new rules will lead to cost savings of about 6 bln. Per year for retailers and 730 million. Per year for cardholders, writes BBC.