European Parliament limits fees for card payments

The EP has backed a bill that sets limits on bank fees for credit and debit card transactions. The proposal seeks to reduce the fees that banks charge merchants for payment services and that cause an increase in the final price for the consumer.

The bill would reduce the fees that banks charge merchants for payment services and that cause an increase in the final price for the consumer.

 

According to the European Commission, these fees cost European merchants ?10 billion a year. Consumers are often unaware of the fees paid by merchants for the payment services they use. Moreover, these fees vary considerably depending on the Member State, as they are not applied by law, but are determined by the national competition authorities.

The European Parliament endorses the lí0.3% cap proposed by the EU executive for credit card transactions. However, in the case of payments made with a debit card, MEPs put the cap on bank charges at 0.2%, as proposed by the EU executive, or at 7 euro cents, whichever is lower. These ceilings would apply to both domestic and international transactions within the EU.

In addition, the European Commission advocates establishing a single deadline of one year from the entry into force of the regulation for the imposition of these limits. The Commission had proposed a 22-month transition period in which these rules would apply only to international transactions, and not to those within a Member State.

Members stress that, in the medium term, these measures should result in a reduction in final prices for consumers. At present, there is no EU legislation regulating bank charges.

PAYMENT SECURITY

The European Parliament has also approved a reform of the current legislation on payment services aimed at strengthening the security of transactions made over the Internet. The new rules guarantee clearer information on the rights and obligations of consumers, payment execution times, contact details and the collection of commissions.

In addition to the increasing number of payments made by credit or debit cards, the expansion of e-commerce and the growing popularity of smartphones have given way to new means of payment. The legislative proposal seeks to eradicate the fragmentation of the European market in this area. In addition, it introduces requirements for risk management and notification of incidents that may jeopardize the security of payment or the protection of personal data.

In the event of unauthorized payments, MEPs propose that the supplier company should refund the consumer the amount of the transaction within 24 hours. In cases of loss or theft of a credit card, for example, customers would only be liable for a limited amount, which could not exceed 50 euros.

The new rules also give consumers greater freedom to choose the payment service that best suits their needs. In addition, payment service providers will be obliged to publish the actual cost of their activities, so that the user can choose the least expensive company.