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Financial services

Regulation 2015/751 on Interchange Fees

On 24 July 2013, the Commission adopted a legislative package in the field of the EU payments framework. This package which proposed a revised Payments Services Directive (PSD2) and a Regulation on Multilateral Interchange Fees (MIFs) was intended to help the payments framework to better serve the needs of an effective European payments market, fully contributing to a payments environment which nurtures competition, innovation and security to the benefits of all stakeholders and consumers in particular. Modernisation of the legislative framework for retail payments was also defined as one of the key actions of the Commission Single Market Act II and is inter alia a response to the Commission's Green Paper "Towards an integrated European market for card, internet and mobile payments" of 2012.

In April 2015, Regulation 2015/751 on interchange fees for card-based transactions was adopted with the particular aim of addressing the problem of widely varying collectively-agreed inter-bank fees regarding card and card based transactions.

The Regulation takes into account much of the Commission and Member States' work on competition enforcement on inter-bank fees regarding transactions with consumer debit and credit cards. It introduces EU wide ceilings for such interchange fees. It also addresses rules limiting retailers' possibilities to steer consumers to using cards with lower fees.

The final text of the Interchange Fee Regulation, adopted on 29 April 2015, was published in the Official Journal on 19 May 2015. It entered into force on 8 June 2015. On this occasion a Competition Policy Brief was published.

Chronology of the legislative process concerning the Interchange Fee Regulation:

Revised Directive on Payment Services (PSD2)

The revised Directive on Payment Services (PSD2) was adopted in November 2015. It will inter alia open the European payments market to new players, in particular payment initiation services providers, account information services providers and payment instrument issuers.  It will also introduce common security requirements to authenticate the user of a payment service; secure customer authentication will be required for all remote electronic payment transactions[3] unless a specific exemption has been agreed at EU level (eg for low value payments).

For more information please also see the website of DG Financial Stability, Financial Services and Capital Markets Union (DG FISMA).

Zero Study

To evaluate the impact of the Regulation, the European Commission will submit a report on its application by 9 June 2019 to the European Parliament and to the Council. The report will compare the situation before the Regulation's entry into force (at time 0) to the situation after. The Commission's report will look in particular at the appropriateness of the levels of interchange fees and at the overall level of fees including the Merchant Service Charges. As well as that, it will take into account the use and cost of the various means of payments and the level of entry of new players, new technology and innovative business models on the market. 

The European Commission has already started collecting data from banks and card schemes. However, in order to get the full picture, the Commission also needs to receive information from merchants. Merchants can participate in the study by clicking this link.

Please bear in mind that once you click the link, you will be asked to provide your email address so that a username and a password will be sent to it. This will enable you to log in and complete the merchant survey. Note that this is done for confidentiality reasons.

The survey is expected to take around XX minutes and we will contact you and ask you to fill in the same survey again in 2019 in order to evaluate the development of the market.

Study on the effects of information disclosure on consumers' choice of payment instruments

The European Commission's Directorate-General for Competition and the Directorate-General for Health and Consumers [now Directorate-General for Justice and Consumers] have carried out a joint study into consumer behaviour and payments in the European market. The study aimed at providing data to determine what the effect is on consumers' choice between alternative payment instruments when purchasers are informed about the real costs borne by retailers. The final report of the study can be downloaded here.

The ultimate goal underpinning the study was the promotion of more competition among payment methods and thereby the lowering of payment costs for consumers. This gave rise to the following research question: "Does higher transparency of charges impact consumers' behaviour in a way which fosters more price competition?"

The outcome of the study supports surcharging as an efficient steering mechanism for payment instruments, despite the fact that consumers are generally believed to be opposed to surcharging. According to the study, monetary incentives (rebates) and disincentives (surcharges) are considerably more effective than information-based measures in driving cost-conscious choices. While rebates are six times more effective than mere education, surcharges are twice more effective than rebates.