Friday, April 04, 2014
European Parliament votes to cap credit card fees
MEPs yesterday voted for an EU cap on card payment fees, which are estimated to cost retailers in the EU over £8 billion each year.
The European Parliament negotiating position, in line with the proposal from the European Commission, favours a cap of 0.3% of the transaction on credit card purchases. But Parliament goes even further than the Commission proposal on debit card fees with a cap of either 7cents (6p) or 0.2% of the transaction value on debit card purchases, whichever is lower. These caps would also be applied to both cross-border and domestic payments.
Research by the EU has shown that a cap in fees could provide retailers with nearly £5 billion in savings and lead to lower consumer prices. However, Parliament is now waiting for the Member States to finalise their negotiating position before such caps can become law.
Liberal Democrat MEP and Chair of the European Parliament's Economic and Monetary Affairs Committee, Sharon Bowles, commented: "Each year businesses suffer from unregulated and unjustifiably high fees when a customer chooses to pay by card.
"Capping these transaction fees will mean businesses can and should be able to pass on savings to consumers, which will directly benefit households up and down the country and contribute to economic growth and consumer confidence.
"As the Party of In, Liberal Democrats want to strengthen and protect our vital trade links with the rest of the EU. By cutting unnecessary costs for businesses the UK can increase its competitiveness within the Single Market."