European Parliament Committee Endorses Proposed Payments Rules; Plenary Vote Set for April (Feb. 21, 2014)
The European Parliament’s ECON Committee today voted upon the 909 amendments proposed by MEPs on the European Commission “Payments Package,” which includes the revised Payment Services Directive (PSD2) and the regulation on interchange fees for card-based payment transactions (MIF Regulation). The amended version of the Payments Package, which results from today vote, next goes to a vote by the full European Parliament in April.
Representatives today voted to back the European Commission’s proposal to cap credit card interchange at 0.3 percent of the transaction value, and also amended the proposed cap on debit transactions to 7 euro cents or 0.2 percent of the transaction, whichever is lower. Banks’ card payment fees range between 0.1 percent and and 2.5 percent, which amount to more than EUR$10 billion annually, according to European Commission data. The proposed rules also aim to require greater transparency in card fees, and would require payment providers to provide refunds to consumers within 24 hours of any unauthorized payments. Retailers also would gain the right to deny acceptance for cards that carry higher interchange fees. “Whilst this would restrict the shopper’s freedom to choose which payment card to use, lower fees should translate into lower prices,” according to a European Parliament press release.
Monica Monaco, managing director of Brussels-based Trust EU Affairs, says the committee’s vote to confirm the proposed legislation was “very surprising” for the traditional payments industry and may ultimately increase costs to consumers and reduce payments security. The PSD2 text fragmentation as a result of the vote shows some inconsistencies between the various provisions, she tells Paybefore. “We seem to be very far with today’s vote from the clear legal framework required to achieve a unified European market for payments.”