Entry into force of new legislation to enhance card payment transparency

Last 9th June, the Regulation on Interchange Fees for Card-based Payment Transactions, adopted last year, entered into force; circumstance that has been welcomed by the Commission as it will increase clarity and efficiency for retailers and consumers regarding costs of payments with debit or credit cards.

When a transaction via debit/credit card takes place, the retailer’s bank (or “acquiring bank”) pays a fee to the bank that granted the card (or “issuing bank”). Then, an interchange fee is deducted from the final amount received by the retailer. Until now, banks usually charged a single blended fee for card transactions, although these charges could differ between brands. The new rules will provide greater transparency.

The first set of rules established by this new legal instrument started to be applicable last December and introduced caps on interchange fees for consumer debit and credit cards. The final set of rules (applicable since now) focuses on allowing a more efficiently card payment market by establishing the following principles:

(i) freedom to choose a preferred payment (for instance, the so-called “co-badging”, such as a single card offering Bancontact and Maestro): retailers may now install a preferred brand in their payment terminals (before it was issuing banks who decided) and consumers may decide at the moment of the payment.

(ii) possibility for consumers to request to co-badge a single card (or in the years to come even their smart phones) with all card products (i.e. Visa, MasterCard, Maestro or American Express).

(iii) information to consumers: retailers shall now display the cards they accept in a clear and unequivocal
manner at the shop or on their websites