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Fair Payment Alliance welcomes EC stand on credit cardsFair Payment Alliance welcomes EC stand on credit cards
John Rimmer
20-Jul-2006
The pressure group lobbying for a fairer fee structure for credit card transactions welcomes the European Commission's acceptance that "changes must be made"
The Travel Retail Fair Payment Alliance (FPA), the group campaigning for a reduction in the fees retailers must pay to credit card companies, has expressed optimism that changes will be made following a public hearing on the issue held last week. The hearing, chaired by the European Commission Competition Directorate director general Phillip Lowe, gathered retailers, banks, credit card companies and consumer groups to review consultation on the Commission's interim report into the payment cards market.At the hearing EU competition commissioner Neelie Kroes stated that the profits made by banks on credit card transactions had been "abnormally high for a sustained period of time". She added: "Large price differentials within the EU—up to 100% for consumers and 650% for businesses—clearly show that market forces are not yet working. Changes must be made to the pricing model. The current system...amounts to a tax on businesses and consumers."
The FPA is lobbying to force change to the system of "interchange fees", the charge that banks agree between themselves before passing on to retailers. Kroes refused to rule out anti-trust action against banks and card companies if they did not accept change.
The FPA's campaign leader and Kappé International chairman Jacques Parson said after the hearing: "I am very pleased to learn of the outcome of this public hearing. It proves again that there is a serious imbalance between the banks and card companies on the one hand and retailers and our customers on the other. Now the tide has turned in our favour and Commissioner Kroes has sent a very strong and clear signal that things must change at EU level. I think it proves just how strong we can be when we work openly together, along with others who share the same goals. I thank my group again for all their support to get us to this stage. But we must not be complacent: there is still much to do if we are to succeed."
Graham Austin, director of EU affairs consultancy GBatBeckenham which is supporting FPA's campaign, added: "The banks and card companies' submission to the hearing was surprising in view of the strength of the Commission's report—they seemed to have buried their heads in the sand. Their representatives did not provide any new evidence or information to support their claims."
The publication of the Commission's final report is expected in December, with a further hearing to be held in early 2007.
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