The European Commission plans to lower retailers' costs for accepting debit and credit card payments in a renewed challenge to dominant players such as Visa and MasterCard, a green paper revealed on Wednesday. Retailers typically pay a fee to card issuers to cover costs, such as authorisation for transactions.
Bigger card companies generally charge retailers more, making it easier for them to find a bank to issue the cards. The EU paper stated the high processing fees banks charge prevent the development of low-cost schemes. It aims to increase competition in the cards market, thus boosting online commerce. The Commission is now consulting with the payment cards industry and vendors - stores and online retailers - to help it establish whether, and by how much, fees should be lowered.
"Online purchases are often too expensive and not adapted to customers' needs," the EU's Commissioner for Internal Market, Michel Barnier, told a news conference. Payfair, a small European card provider, said it struggled to attract business across the bloc when it launched in 2009 because of the complexity of negotiating fees with banks in different countries. "We should reduce interchange fees to a reasonable level," Dominique Buysschaert, Payfair's founder, said. "This would increase the number of electronic payments and more than compensate (for) a reduction in revenue."
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