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Fair Payment Alliance hails step forwardFair Payment Alliance hails step forward
John Rimmer
18-Apr-2006
An investigation into the credit card market conducted by the European Commission could lead to big reductions in retailers' credit card costs, say campaigners
The Fair Payment Alliance has welcomed the findings of a European Commission study into credit card charges payable by retailers whenever customers use a card for their purchases. The Alliance, a campaign group of travel retailers headed by Kappé International chairman Jacques Parson, said that the interim report published by competition commissioner Neelie Kroes last week supported many of the FPA's arguments on credit card fees and could lead to "significant reductions".In her report, Kroes accepted that Interchange fees—the costs agreed by banks and passed on to retailers to pay—often lead to disproportionate costs for operators. The report also found that Visa's fees can vary by up to 500% across the EU's 25 member states, while MasterCard charges can vary by as much as 650%.
Kroes argued that "the situation must change", adding: "Prices paid by retailers for accepting cards should be decided by the free play of market forces, not imposed by country-wide agreements. We will look at whether the Commission should pursue cases against banks and card networks under the EC Treaty's anti-trust rules. We have identified a number of possible individual case investigations and will decide on concrete steps once we have listened to all who have comments [to make]."
FPA campaigner Parson said: "The Commission has given everyone involved in the FPA a very nice Easter present. All parties involved, such as downtown stores and others accepting cards in their business, have recognised the significant contribution the Travel-Retail FPA has played and I thank all the members of our group again for helping me to provide the ammunition to help the Commission draw such fundamental conclusions. It is a very good example of how sharing information can be truly effective for the industry's overall good. Now we must examine the report in detail and prepare our next steps to ensure the findings in the report become reality in terms of a fairer, economic, framework for us and our customers."
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(10-May-2006) - The Travel Retail Fair Payment Alliance is urging European retailers to fill in a questionnaire compiled by the European Commission as it decides how credit card charges should be regulated
(15-Jan-2008) - The European Commission decided that MasterCard’s fee system is illegal under European competition law
(1-Mar-2006) - UK. The Office of Fair Trading (OFT) has launched a second investigation into charges levied by Mastercard just six months after the UK watchdog published a report condemning the credit card firm for breaching the country's competition law
(1-Nov-2004) - Time for the Commission to lay its cards on the table
(24-May-2005) - Spanish travel-retailers will be boosted by competition authorities' decision forbidding banks from setting a collective interchange fee on credit card payments.