91����ԭ��

A leaked document circulated by the French government and a commitment from members of the European Parliament (MEPs) show that card fees could be on the agenda for the EU’s Payment Services Regulation (PSR). 

A paper seen by 91����ԭ�� and circulated with the European Council reveals that payment card fees are facing increased scrutiny from the French government. 

“The question of transparency of payment card schemes fees and rules has arisen as a topic of concern for both merchants and PSPs [payment service providers], whether they are issuers or acquirers,” the document acknowledges. 

It goes on to note that acquirers and merchants have said that the lack of transparency and clarity in pricing and provision of scheme and processing services prevent merchants from understanding the reasons for price changes and assessing what services they purchase, and “which ones are in fact needed”.

The French government also references a recent report of the European Court of Auditors on digital payments.

This noted that the non-disclosure agreements between card schemes and payment service providers “ultimately impede merchants, issuers and acquirers from disclosing data related to fees linked to card payments, which poses difficulties in terms of transparency of the payment card markets”. 

France says in the document that it “considers that the transparency of rules and fees of payment card schemes in particular for merchants is fundamental to reinforce competition in the payment card markets and should be tackled under the current negotiation”. 

The paper suggests that creating space for this in the legislation would resolve the “aforementioned difficulties without price intervention”. 

“It can be easily reattached to the PSR that lays down uniform requirements on the provision of payment services and electronic money services as regards the transparency of conditions for payment services,” the document says.

It adds that “such reinforcement would be without prejudice to the existing provisions of the Interchange Fee Regulation [IFR]”.

A shared concern

The circulation of the French paper comes at the same time as a proposed  to the EU’s annual report on competition policy by MEPs on the Economic and Monetary Affairs Committee (ECON).

In the amendment, lawmakers Stéphanie Yon-Courtin, Gilles Boyer, Engin Eroglu and Billy Kelleher note “with particular concern the dominant position of two International Card Schemes in the EU payments market and their practices to reinforce and extend their dominance over the EU digital payments market, potentially further increasing barriers to entry and hampering long-term innovation”.

The MEPs also suggest that this is leading to higher costs for EU businesses and ultimately consumers.

They call on the European Commission “to take decisive actions”, emphasising the need to review the IFR “to tackle the significant rise of card scheme fees charged by international card schemes and ensure a fair, competitive, and transparent market environment”. 

This comes after news last year that the commission is scrutinising the fees charged by both Visa and Mastercard. 

Will card fees end up in the PSR?

When asked by 91����ԭ�� whether any of this was likely to come to fruition through the EU’s upcoming PSR, a lobbyist said quite confidently that “there was no chance” as it is “just too complicated”.

And yet, it technically would be allowed. 

In the EU's legislative process, the European Parliament and the Council of the EU can amend proposals from the European Commission, and these amendments may extend beyond the original scope or modify existing legislation. 

Such changes are common and form part of the ordinary legislative procedure.

However, implementing these amendments can be complex, requiring negotiations between the European Parliament, the Council and the Commission, and although legislative bodies have the authority to propose changes, the complexity and scope of amendments can impact the duration and intricacy of the legislative process.

The payments industry should take note of what happened with the Instant Payments Regulation (IPR). 

Few expected MEPs to successfully amend the Settlement Finality Directive to enable payment and e-money institutions to gain direct access to payment systems through the regulation — yet they eventually managed to do so. 

The UK example

The MEPs and the French government seem to be taking inspiration from the Payment Systems Regulator in the UK, which recently announced the results of a study of Mastercard and Visa’s fees.

It found that between 2017 and 2023, the two schemes both raised their core scheme and processing fees by more than 25 percent in real terms. 

The Payment Systems Regulator added that the schemes do not provide sufficiently clear and detailed information to acquirers or merchants, resulting in them receiving complex or incomplete information on scheme and processing services and fees.

This raises both acquirers’ and merchants’ costs and prevents them from negotiating a better deal.

Although Visa and Mastercard have both spoken out against the findings — and the Payment Systems Regulator is now due to be wound down — intense lobbying from Europe’s merchant and fintech institutions on the subject of the international schemes is seemingly feeding into key stakeholders' purview on future regulatory change.