Payment Networks to Slash Interchange Fees in France (Sept. 24, 2013)
MasterCard and Visa have agreed to cut interchange fees by nearly half in France, striking a deal with the French Competition Authority, the country’s anti-trust regulator. Under the agreement, the payment card networks will lower interchange fees on purchases to 0.28 percent of a transaction’s value starting on Nov. 1. Currently, MasterCard charges .055 percent and Visa 0.50 percent on purchases in France. Additionally, ATM withdrawal fees will go down to 0.55 euros (US$0.74), from 0.60 euros (US$0.81) for MasterCard and 0.75 euros (US$1.01) for Visa. France’s domestic interbank payment card network, Groupement des Cartes Bancaires, reached its own agreement with the French regulator in 2011 to limit interchange fees to about the same level.
The new limits only cover transactions that take place within France. Cross-border transactions within the European Union are regulated by the European Commission, which also has been pressing the card networks to lower fees. The EC this summer unveiled a proposal to set limits on interchange fees within the EU. Currently, there are no EU-wide limits on interchange fees, though several member countries are in the process of adopting their own legislation and may do so before the EC’s proposal is reviewed and adopted, which is expected next year.
The U.S., meanwhile, has seen several long-running legal battles over interchange fees. A lawsuit brought by retailers including Walmart, Target and Starbucks alleging the payment networks colluded to fix interchange fees resulted in a $7.2 billion proposed settlement, though many of the retailer plaintiffs have rejected the settlement because it precludes merchants from pursuing further litigation. A separate legal battle over debit interchange limits set by the Federal Reserve soon will head to an appeals court in Washington, D.C., after the Fed’s Board of Governors appealed a lower court’s ruling that the agency had set interchange caps higher than the level intended by the Durbin Amendment.