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EC proposals on credit and debit cards will be good news for consumers and retailers
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Published on 24-07-13

The European Commission has tabled proposals to give users of debit and credit cards – and of other payment services – a better deal. A new Payment Services Directive will give consumers a series of new rights while an accompanying Regulation will cap the fees retailers pay to banks to process debit and credit card payments. That should also reduce the costs to consumers.

    EC proposals on credit and debit cards will be good news for consumers and retailers

    Under the Payment Services Directive, airlines and others will no longer be able to demand additional payments from customers paying by the most commonly used cards, for example at the end of the online purchasing process.

    The proposal would reduce the maximum amount consumers might need to meet from their own pockets in the case of fraud or incorrect transactions to EUR 50 (£43) from EUR 150 (£129).

    Rights to unconditional refunds will also be strengthened and extended, notably to direct debit transactions.

    The new Directive will also increase protection for EU consumers purchasing goods and services from providers outside the EU: UK customers frequently for example buy on holiday and online from the US.

    Meanwhile a proposal for an EU regulation on "interchange fees" paid by retailers to banks for processing card transactions will put an end to excessive and untransparent charges ultimately borne by consumers.

    The caps will be set at 0.2% of transaction value for debit cards and 0.3% for credit cards. They should lead over time to lower prices in the shops.

    In the UK the Commission estimates interchange fees on debit cards should fall by around 20% from current average levels. Credit card fees will in many cases fall by considerably more.

    Currently these fees are untransparent and competition regulators have found them to be excessive and to stifle competition. 

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    Last update: 31/07/2013  |Top