Procedure : 2013/0265(COD)
Document stages in plenary
Document selected : A7-0167/2014

Texts tabled :

A7-0167/2014

Debates :

PV 02/04/2014 - 26
CRE 02/04/2014 - 26

Votes :

PV 03/04/2014 - 7.3
CRE 03/04/2014 - 7.3

Texts adopted :

P7_TA(2014)0279

REPORT     ***I
PDF 395kWORD 515k
11 March 2014
PE 522.956v02-00 A7-0167/2014

on the proposal for a regulation of the European Parliament and of the Council on interchange fees for card-based payment transactions

(COM(2013)0550 – C7-0241/2013 – 2013/0265(COD))

Committee on Economic and Monetary Affairs

Rapporteur: Pablo Zalba Bidegain

AMENDMENTS
DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 OPINION of the Committee on the Internal Market and Consumer Protection
 PROCEDURE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council on interchange fees for card-based payment transactions

(COM(2013)0550 – C7-0241/2013 – 2013/0265(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to Parliament and the Council (COM(2013)0550),

–   having regard to Article 294(2) and Article 114(1) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0241/2013),

–   having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–   having regard to the opinion of the European Economic and Social Committee of 11 December 2013(1),

–   having regard to the opinion of the European Central Bank of 5 February 2014(2),

–   having regard to Rule 55 of its Rules of Procedure,

–   having regard to the report of the Committee on Economic and Monetary Affairs and the opinion of the Committee on the Internal Market and Consumer Protection (A7-0167/2014),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Amendment  1

Proposal for a regulation

Recital 7

Text proposed by the Commission

Amendment

(7) Preparation of legislation is under way in several Member States21 to regulate interchange fees, covering a number of issues, including caps on interchange fees at various levels, merchant fees, the Honour All Cards rules or steering measures. The existing administrative decisions in some Member States vary significantly. In view of the harmfulness of interchange fees to retailers and consumers, a further introduction of regulatory measures at national level aimed at addressing the level or divergencies of these fees is anticipated. Such national measures would be likely to lead to significant barriers to the completion of the internal market in the area of cards, internet and mobile payments based on cards and would therefore hinder the freedom to provide services.

(7) Preparation of legislation is under way or already completed in several Member States21 to regulate interchange fees, covering a number of issues, including caps on interchange fees at various levels, merchant fees, the Honour All Cards rules or steering measures. The existing administrative decisions in some Member States vary significantly. To make the levels of interchange fees more consistent, a further introduction of regulatory measures at national level aimed at addressing the level of or divergences between these fees is anticipated. Such national measures would be likely to lead to significant barriers to the completion of the internal market in the area of cards, internet and mobile payments based on cards and would therefore hinder the freedom to provide services.

__________________

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21 Italy, Hungary, Poland and the United Kingdom .

21Italy, Hungary, Poland and the United Kingdom.

Amendment  2

Proposal for a regulation

Recital 8

Text proposed by the Commission

Amendment

(8) Payment cards are the most frequently used electronic payment instrument for retail purchases. However, integration of the Union payment card market is far from complete as many payment solutions cannot develop beyond their national borders or new pan-Union providers are prevented from entering the market. The lack of market integration currently results in higher prices and less choice in payment services for consumers and retailers, and more limited opportunities to take advantage of the internal market. There is therefore a need to remove obstacles to the efficient functioning of the card market, including mobile and internet payments that are based on card transactions which still pose barriers to the deployment of a fully integrated market.

(8) Payment cards are the most frequently used electronic payment instrument for retail purchases. However, integration of the Union payment card market is far from complete as many payment solutions cannot develop beyond their national borders or new pan-Union providers are prevented from entering the market. To take full advantage of the internal market, there is a need to remove obstacles to the integration of new card-payment options, including mobile and internet payments that are based on card transactions.

Amendment  3

Proposal for a regulation

Recital 9

Text proposed by the Commission

Amendment

(9) To enable the internal market to function effectively, the use of electronic payments should be promoted and facilitated to the benefit of retailers and consumers. Cards and other electronic payments can be used in a more versatile manner, including possibilities to pay online in order to take advantage of the internal market and e-commerce, whilst electronic payments also provide retailers with potentially secure payments. Card and card based payments instead of cash use could therefore be beneficial for retailers and consumers, provided the fees for the use of the payment systems are set at an economically efficient level, whilst contributing to innovation and market entry of new operators.

(9) To enable the internal market to function effectively, the use of electronic payments should be promoted and facilitated to the benefit of retailers and consumers. Cards and other electronic payments can be used in a more versatile manner, including possibilities to pay online in order to take advantage of the internal market and e-commerce, whilst electronic payments also provide retailers with potentially secure payments. Card and card based payments instead of cash use could therefore be beneficial for retailers and consumers, provided the fees for the use of the payment systems are set at an economically efficient level, whilst contributing to fair competition, innovation and market entry of new operators.

Amendment  4

Proposal for a regulation

Recital 10

Text proposed by the Commission

Amendment

(10) One of the key practices hindering the functioning of the internal market in card and card-based payments is the widespread existence of interchange fees, which are in most Member States not subject to any legislation. Interchange fees are inter-bank fees usually applied between the card-acquiring payment service providers and the card-issuing payment service providers belonging to a certain card scheme. Interchange fees are a main part of the fees charged to merchants by acquiring payment service providers for every card transaction. Merchants in turn incorporate these card costs in the general prices of goods and services. Competition between card schemes appears in practice to be largely aimed at convincing as many issuing payment service providers (e.g. banks) as possible to issue their cards, which usually leads to higher rather than lower interchange fees on the market, in contrast with the usual price disciplining effect of competition in a market economy. Regulating interchange fees would improve the functioning of the internal market.

(10) In most Member States, interchange fees are not subject to any legislation but, rather, to decisions of the national competition authorities. Interchange fees are inter-bank fees usually passed from card-acquiring payment service providers to card-issuing payment service providers belonging to the relevant scheme. Interchange fees are a main component of the fees charged to merchants by acquiring payment service providers for every card transaction. Merchants in turn incorporate these card costs, like all their other costs, in the general prices of goods and services. Consistent application of the competition rules to interchange fees would reduce transaction costs for consumers and thus improve the functioning of the internal market.

Amendment  5

Proposal for a regulation

Recital 11

Text proposed by the Commission

Amendment

(11) The currently existing wide variety of interchange fees and their level prevent the emergence of 'new' pan Union players on the basis of business models with lower interchange fees, to the detriment of potential economies of scale and scope and their resulting efficiencies. This has a negative impact on retailers and consumers and prevents innovation. As Pan-Union players would have to offer issuing banks as a minimum the highest level of interchange fee prevailing in the market they want to enter it also results in persisting market fragmentation. Existing domestic schemes with lower or no interchange fees may also be forced to exit the market because of the pressure from banks to obtain higher interchange fees revenues. As a result, consumers and merchants face restricted choice, higher prices and lower quality of payment services while their ability to use pan-Union payment solutions is restricted. In addition, retailers cannot overcome the fee differences by making use of card acceptance services offered by banks in other Member States. Specific rules applied by the payment schemes require the application of the interchange fee of the 'Point of Sale' (country of the retailer) for each payment transaction. This prevents acquiring banks from successfully offering their services on a cross border basis. It also prevents retailers from reducing their payment costs to the benefit of consumers.

(11) The currently existing wide variety of interchange fees and their level prevent the emergence of 'new' pan Union players on the basis of business models with lower or no interchange fees, to the detriment of potential economies of scale and scope and their resulting efficiencies. This has a negative impact on retailers and consumers and prevents innovation. As Pan-Union players would have to offer issuing banks as a minimum the highest level of interchange fee prevailing in the market they want to enter it also results in persisting market fragmentation. Existing domestic schemes with lower or no interchange fees may also be forced to exit the market because of the pressure from banks to obtain higher interchange fees revenues. As a result, consumers and merchants face restricted choice, higher prices and lower quality of payment services while their ability to use pan-Union payment solutions is restricted. In addition, retailers cannot overcome the fee differences by making use of card acceptance services offered by banks in other Member States. Specific rules applied by the international card payment schemes require, on the basis of their territorial licensing policies, the application of the interchange fee of the ‘Point of Sale’ (country of the retailer) for each payment transaction. This prevents acquirers from successfully offering their services on a cross-border basis. It can also prevent retailers from reducing their payment costs to the benefit of consumers.

Amendment  6

Proposal for a regulation

Recital 15

Text proposed by the Commission

Amendment

(15) This Regulation follows a gradual approach. As a first step, it is necessary to take measures to facilitate cross-border issuing and acquiring of payment card transactions. Allowing merchants to choose an acquirer outside their own Member State (‘cross border acquiring’) and imposing a maximum level of cross border interchange fees for cross border acquired transactions should provide the necessary legal clarity. In addition, licences for issuing or acquiring of payment instruments should be valid without geographic restrictions within the Union. These measures would facilitate the smooth functioning of an internal market for card, internet and mobile payments, to the benefit of consumers and retailers.

(15) In order to facilitate the smooth functioning of an internal market for card, internet and mobile payments, to the benefit of consumers and retailers, this Regulation applies to cross-border and to national issuing and acquiring of payment card transactions. If merchants can choose an acquirer outside their own Member State (‘cross-border acquiring'), which will be facilitated by the imposition of the same maximum level of both domestically and cross-border interchange fees for acquired transactions and the prohibition of territorial licensing, it should be possible to provide the necessary legal clarity and to prevent distortions of competition between payment-card systems.

Amendment  7

Proposal for a regulation

Recital 16

Text proposed by the Commission

Amendment

(16) As a consequence of unilateral undertakings and commitments accepted in the framework of competition proceedings, many cross-border card payment transactions in the Union are already carried out respecting the maximum interchanges fees applicable to the first phase of this Regulation. Therefore, the provisions relating to those transactions should enter into force quickly, creating opportunities for retailers to seek cheaper acquiring services cross-border, and incentivising domestic banking communities or schemes to lower their acquiring fees.

(16) As a consequence of unilateral undertakings and commitments accepted in the framework of competition proceedings, many cross-border card payment transactions in the Union are already carried out respecting the maximum interchanges fees. In order to provide for fair competition in the market for acquiring services, the provisions relating to cross-border and to national transactions should apply simultaneously and within a reasonable period after entry into force of this Regulation, taking account of the difficulty and complexity of the migration of payment-card systems, which this Regulation necessitates.

Amendment  8

Proposal for a regulation

Recital 17

Text proposed by the Commission

Amendment

(17) For domestic transactions, a transition period is necessary to provide payment services providers and schemes with time to adapt to the new requirements. Therefore, after a two year period following the entry into force of this Regulation and in order to provide for a completion of an internal market for card-based payments, the caps on interchange fees for consumer card transactions should be extended to cover all, cross-border and domestic payments.

(17) However, a transitional period is necessary to provide payment services providers and schemes with time to adapt to the new requirements. Therefore, after a one-year period following the entry into force of this Regulation and in order to provide for a completion of an internal market for card-based payments, the caps on interchange fees for consumer card transactions should cover all, cross-border and domestic payments.

Amendment  9

Proposal for a regulation

Recital 18

Text proposed by the Commission

Amendment

(18) In order to facilitate cross border acquiring all (cross-border and domestic) ‘consumer’ debit card transactions and card based payment transaction should have a maximum interchange fee of 0,20% and all (cross-border and domestic) consumer credit card transactions and card based payment transactions based on those should have a maximum interchange fee of 0.30%.

(18) All debit card transactions and card based payment transaction should have a maximum interchange fee of 0,2 % and allcredit card transactions and card based payment transactions based on those should have a maximum interchange fee of 0,3 %.

Amendment  10

Proposal for a regulation

Recital 18 a (new)

Text proposed by the Commission

Amendment

 

(18a) The impact assessment shows that a prohibition of interchange fees for debit card transactions would be beneficial for card acceptance, card usage, development of the single market and generate more benefits to merchants and consumers than a cap set at any higher level. Moreover it would avoid negative effects on national systems with very low or zero interchange fees for debit transaction by a higher cap due to cross border expansion or new market entrants increasing fee levels to the level of the cap. A ban on interchange fees for debit card transactions also addresses the threat of exporting the interchange fee model to new, innovative payment services such as mobile and online systems.

Amendment  11

Proposal for a regulation

Recital 19 a (new)

Text proposed by the Commission

Amendment

 

(19a) In accordance the basic principles of the internal market, acquirers should be able to provide their services to merchants throughout the Union applying the multilateral interchange fees (MIFs) that they apply in their national market. They should not apply higher MIFs to cross-border transactions than they apply to national transactions.

Amendment  12

Proposal for a regulation

Recital 22

Text proposed by the Commission

Amendment

(22) Payment card transactions are generally carried out on the basis of two main business models, so-called three party payment card schemes (cardholder – acquiring and issuing scheme - merchant) and four party payment card schemes (card holder- issuing bank- acquiring bank- merchant). Many four payment card party schemes are using an explicit interchange fee, mostly multilateral. Interchange fees (fees paid by acquiring banks to incentivise card issuing and card use) are implicit in three party payment card schemes. To acknowledge the existence of implicit interchange fees and contribute to the creation of a level playing field, three party payment card schemes using payment service providers as issuers or acquirers should be considered as four party payment card schemes and should follow the same rules, whilst transparency and other measures related to business rules should apply to all providers.

(22) Payment card transactions are generally carried out on the basis of two main business models, so-called three party payment card schemes (cardholder – acquiring and issuing scheme - merchant) and four party payment card schemes (card holder- issuing bank- acquiring bank- merchant). Many four payment card party schemes are using an explicit interchange fee, mostly multilateral. Interchange fees (fees paid by acquiring banks to incentivise card issuing and card use) are implicit in three party payment card schemes. To acknowledge the existence of implicit interchange fees and contribute to the creation of a level playing field, three party payment card schemes using payment service providers as issuers or acquirers should be considered as four party payment card schemes and should follow the same rules, whilst transparency and other measures related to business rules should apply to all providers. Three-party schemes should accept transactions made using their cards from any acquirer based on general card transaction standards and acquiring rules comparable to the merchant rules for the specific three party schemes and with interchange caps in accordance with this Regulation.

Justification

Enforcing general acquiring on three party schemes will make them act as four party schemes in relation to MIF caps and will increase competition regarding acquiring services.

Amendment  13

Proposal for a regulation

Recital 23

Text proposed by the Commission

Amendment

(23) It is important to ensure that the provisions concerning the interchange fees to be paid or received by payment service providers are not circumvented by alternative flows of fees to issuing payment services providers. To avoid this, the ‘net compensation’ of fees paid and received by the issuing payment service provider from a payment card scheme should be considered as the interchange fee. When calculating the interchange fee, for the purpose of checking whether circumvention is taking place the total amount of payments or incentives received by an issuing payment services provider from a payment card scheme with respect to the regulated transactions less the fees paid by the issuing payment services provider to the scheme should be taken into account. Payments, incentives and fees considered could be direct (i.e. volume-based or transaction-specific) or indirect (including marketing incentives, bonuses, rebates for meeting certain transaction volumes).

(23) It is important to ensure that the provisions concerning the interchange fees to be paid or received by payment service providers are not circumvented by alternative flows of fees to issuing payment services providers. To avoid this, the ‘net compensation’ of fees paid and received by the issuing payment service provider, including possible authorisation charges, from a payment card scheme should be considered as the interchange fee. When calculating the interchange fee, for the purpose of checking whether circumvention is taking place the total amount of payments or incentives received by an issuing payment services provider from a payment card scheme with respect to the regulated transactions less the fees paid by the issuing payment services provider to the scheme and the monetary incentives or equivalent received by a cardholder from a payment card scheme should be taken into account. All payments, incentives and fees, whether direct (i.e. volume-based or transaction-specific) or indirect (including marketing incentives, bonuses, rebates for meeting certain transaction volumes). In checking circumventions of this Regulation providing for the maximum amount of interchange fees, the profit of payment card issuers that results from special programmes carried out jointly by payment card issuers and payment card schemes, and revenue from processing, licensing and other fees providing revenue to card organisations should, in particular, be taken into account.

Amendment  14

Proposal for a regulation

Recital 30

Text proposed by the Commission

Amendment

(30) For the effective functioning of the limitations to the Honour All Cards Rule certain information is indispensable. First, payees should have the means to identify the different categories of cards. Therefore, the various categories should be identifiable visibly and electronically on the device. Secondly, also the payer should be informed about the acceptance of his payment instrument(s) at a given point of sale. It is necessary that any limitation on the use of a given brand to be announced by the payee to the payer at the same time and under the same conditions as the information that a given brand is accepted.

(30) Payees and payers should have the means to identify the different categories of cards. Therefore, the various categories should be identifiable electronically and for newly issued card based payment instruments also visibly on the device or on the payment terminal. Secondly, also the payer should be informed about the acceptance of his payment instrument(s) at a given point of sale.

Amendment  15

Proposal for a regulation

Recital 30 a (new)

Text proposed by the Commission

Amendment

 

(30a) A payment is an agreement between the payer and the payee. In order to ensure that competition between brands is effective, it is important that the choice of payment application be made by users, not imposed by the upstream market, comprising payment card systems, payment service providers or processors. Such an arrangement should not prevent payers and payees from setting a default choice of application, where technically feasible, provided that that choice can be changed for each transaction. If the payee selects an application supported by both, the user should be able to reject it and choose another application.

Amendment  16

Proposal for a regulation

Recital 31

Text proposed by the Commission

Amendment

(31) In order to ensure that redress is possible where this Regulation has been incorrectly applied, or where disputes occur between payment services users and payment services providers, Member States should establish adequate and effective out-of-court complaint and redress procedures. Member States should lay down rules on the penalties applicable to infringements of this Regulation and should ensure that those penalties are effective, proportionate and dissuasive and that they are applied.

(31) In order to ensure that redress is possible where this Regulation has been incorrectly applied, or where disputes occur between payment services users and payment services providers, Member States should establish adequate and effective out-of-court complaint and redress procedures. Member States, following guidelines set up by the European Supervisory Authority (European Banking Authority) ('EBA'), established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council1a, should lay down rules on the penalties applicable to infringements of this Regulation and should ensure that those penalties are effective, proportionate and dissuasive and that they are applied.

 

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1a Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12).

Amendment  17

Proposal for a regulation

Article 1 – paragraph 1

Text proposed by the Commission

Amendment

1. This Regulation lays down uniform technical and business requirements for payment card transactions carried out within the Union, where both the payer's payment service provider and the payee's payment service provider are established therein.

1. This Regulation lays down uniform technical and business requirements for card-based payment transactions carried out within the Union, where both the payer's payment service provider and the payee's payment service provider are established therein.

Amendment  18

Proposal for a regulation

Article 1 – paragraph 2

Text proposed by the Commission

Amendment

2. This Regulation does not apply to payment instruments that can be used only within a limited network designed to address precise needs through payment instruments only to be used in a limited way, because they allow the specific instrument holder to acquire goods or services only in the premises of the issuer, within a limited network of service providers under a direct commercial agreement with a professional issuer, or because they can be used only to acquire a limited range of goods or services.

2. This Regulation does not apply to payment instruments that can be used only within a limited network designed to address precise needs through payment instruments only to be used in a limited way, because they allow the specific instrument holder to acquire goods or services only in the premises of the issuer, within a limited network of service providers under a direct commercial agreement with a professional issuer, or because they can be used only to acquire a very narrow range of goods or services.

Amendment  19

Proposal for a regulation

Article 1 – paragraph 3 – point a

Text proposed by the Commission

Amendment

(a) transactions with commercial cards,

deleted

Justification

Company cards need to be included, because otherwise consumers would cross-subsidise company cards.

Amendment  20

Proposal for a regulation

Article 1 – paragraph 3 – point b

Text proposed by the Commission

Amendment

(b) cash withdrawals at automatic teller machines and

(b) cash withdrawals or transactions other than sales of goods or services performed at automatic teller machines and cash disbursements at the counter of payment service providers' premises; and

Amendment  21

Proposal for a regulation

Article 1 – paragraph 3 – point c

Text proposed by the Commission

Amendment

(c) transactions with cards issued by three party payment card schemes.

(c) transactions with cards issued by three party payment card schemes where their volume does not exceed a threshold set by the Commission;

Amendment  22

Proposal for a regulation

Article 1 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a. Articles 6 and 7 shall not apply to domestic debit card schemes that operate with an average interchange fee or net compensation model which is verifiably below the threshold value in Articles 3 and 4.

Justification

Cost-efficient domestic debit card schemes that already today operate with an interchange fee level below the threshold proposed by the Commission (0.2 %) can be exempted from the business rules articles 6 and 7 if national authorities decide to opt out. The Commission’s impact assessment accompanying the Regulation on Multilateral Interchange Fees (p. 206) indicates that this exemption would be relevant to only a limited number of Member States.

Amendment  23

Proposal for a regulation

Article 2 – point 4

Text proposed by the Commission

Amendment

(4) 'debit card transaction' means an card payment transaction included with prepaid cards linked to a current or deposit access account to which a transaction is debited in less than or 48 hours after the transaction has been authorised/initiated.

(4) 'debit transaction by card' means a card-based payment transaction linked to a current or deposit access account to which the transaction is debited immediately upon being cleared, as well as a transaction with a prepaid card;

Amendment  24

Proposal for a regulation

Article 2 – point 5

Text proposed by the Commission

Amendment

(5) ‘credit card transaction’ means an card payment transaction where the transaction is settled more than 48 hours after the transaction has been authorised/initiated;

(5) ‘credit transaction by card’ means a card based payment transaction which is debited at least two business days after the transaction has been authorised/initiated.

Amendment  25

Proposal for a regulation

Article 2 – point 8

Text proposed by the Commission

Amendment

(8) ‘cross-border payment transaction’ means a card payment or card-based payment transaction initiated by a payer or by a payee where the payer's payment service provider and the payee's payment service provider are established in different Member States or where the payment card is issued by an issuing payment service provider established in a different Member State than that of the point of sale;

(8) ‘cross-border payment transaction’ means a card payment or card-based payment transaction initiated by a payer or by a payee where the payer's payment service provider or the point of sale is established in a different Member State than that of the payee's payment service provider or where the payment card is issued by an issuing payment service provider established in a different Member State than that of the point of sale, including where a payee uses the services of an acquirer located in another Member State;

Amendment  26

Proposal for a regulation

Article 2 – point 12 a (new)

Text proposed by the Commission

Amendment

 

(12a) 'payment card' means a debit or credit card which entitles the cardholder to access cardholder's funds, or enables the cardholder to make a payment through the intermediation of an acquirer and which is accepted by a payee in order to process a payment transaction;

Justification

The term 'payment card' is used in the proposal on multiple occasions, for reasons of clarity it seems necessary to provide for such definition.

Amendment  27

Proposal for a regulation

Article 2 – point 13

Text proposed by the Commission

Amendment

(13) ‘payment card scheme’ means a single set of rules, practices, standards and/or implementation guidelines for the execution of payment transactions across the Union and within Member States, and which is separated from any infrastructure or payment system that supports its operation;

(13) ‘payment scheme’ means a single set of rules, practices, standards and/or implementation guidelines for the execution of payment transactions across the Union and within Member States, and which is separated from any infrastructure or payment system that supports its operation;

Amendment                28

Proposal for a regulation

Article 2 – point 15

Text proposed by the Commission

Amendment

(15) three party payment card scheme means a payment card scheme in which payments are made from a payment account held by the scheme on behalf of the cardholder to a payment account held by the scheme on behalf of the payee, and card based transactions based on the same structure. When a three party payment card scheme licenses other payment service providers for the issuance and/or the acquiring of payment cards, it is considered as a four party payment card scheme;

(15) 'three party payment card scheme' means a payment card scheme in which payments are made from a payment account held by the scheme on behalf of the payer to a payment account held by the scheme on behalf of the payee, and card based transactions based on the same structure. When a three party payment card scheme licenses other payment service providers for the issuance and/or the acquiring of payment cards, or issues payment cards with a co-brand partner or through an agent, it is considered as a four party payment card scheme;

Justification

The term 'payment card' is used in the proposal on multiple occasions, for reasons of clarity it seems necessary to provide for such definition.

Amendment                29

Proposal for a regulation

Article 3 – title

Text proposed by the Commission

Amendment

Interchange fees for cross-border consumer debit or credit card transactions

Interchange fees for consumer debit or credit card based payment transactions

Amendment  30

Proposal for a regulation

Article 3 – paragraph 1

Text proposed by the Commission

Amendment

1. With effect from two months after the entry into force of this Regulation, payment services providers shall not offer or request for cross-border debit card transactions a per transaction interchange fee or other agreed remuneration with an equivalent object or effect of more than 0,2 % of the value of the transaction.

1. With effect from ...* , payment services providers shall not offer or request for debit transactions by card a per transaction interchange fee or other agreed remuneration with an equivalent object or effect of more than the lower amount of 7 eurocents or 0,2 % of the value of the transaction.

 

____________

 

* OJ please insert date: one year after the entry into force of this Regulation.

Amendment  31

Proposal for a regulation

Article 3 – paragraph 2

Text proposed by the Commission

Amendment

2. With effect from two months after the entry into force of this Regulation, payment services providers shall not offer or request for cross-border credit card transactions a per transaction interchange fee or other agreed remuneration with an equivalent object or effect of more than 0,3 % of the value of the transaction.

2. With effect from ...* , payment services providers shall not offer or request for credit transactions by card a per transaction interchange fee or other agreed remuneration with an equivalent object or effect of more than 0,3 % of the value of the transaction.

 

____________

 

* OJ please insert date: one year after the entry into force of this Regulation.

Amendment  32

Proposal for a regulation

Article 3 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. Member States may maintain or introduce lower caps or measures of equivalent object or effect through national legislation.

Amendment  33

Proposal for a regulation

Article 4

Text proposed by the Commission

Amendment

Article 4

deleted

Interchange fees for all consumer debit or credit card transactions

 

1. With effect from two years after the entry into force of this Regulation, payment service providers shall not offer or request a per transaction interchange fee or other agreed remuneration with an equivalent object or effect of more than 0,2 % of the value of the transaction for any debit card based transactions.

 

2. With effect from two years after the entry into force of this Regulation, payment service providers shall not offer or request a per transaction interchange fee or other agreed remuneration with an equivalent object or effect of more than 0,3 % of the value of the transaction for any credit card based transactions.

 

Amendment  34

Proposal for a regulation

Article 5

Text proposed by the Commission

Amendment

5. For the purposes of the application of the caps referred to in Article 3 and Article 4, any net compensation received by an issuing bank from a payment card scheme in relation to payment transactions or related activities shall be treated as part of the interchange fee.

For the purposes of the application of the caps referred to in Article 3, any net compensation received by an issuing payment service provider in relation to payment transactions shall be treated as part of the interchange fee.

 

Competent authorities shall prevent any attempts by the payment service providers to circumvent this Regulation, including the issuance of payment cards in third countries.

Amendment  35

Proposal for a regulation

Article 6 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a. Any restriction of the provision of payment-related services in payment card schemes rules shall be prohibited, unless it is non-discriminatory and objectively necessary to operate the payment scheme.

Amendment  36

Proposal for a regulation

Article 6 a (new)

Text proposed by the Commission

Amendment

 

Article 6a

 

Cross-border transactions

 

For cross-border transactions, the interchange fee applicable shall be that of the country of the acquirer.

Justification

To allow the single market to operate most effectively, it is necessary to ensure that the interchange fee applied for all transactions is that of the member state in which the acquirer is situated. This will facilitate competition below capped rates where these are applicable.

Amendment  37

Proposal for a regulation

Article 7 – paragraph 2

Text proposed by the Commission

Amendment

2. Payment card schemes shall allow for the possibility that authorisation and clearing messages of single card transactions be separated and processed by different processing entities.

2. Payment card schemes and issuers shall allow for the possibility that authorisation and clearing messages of single card transactions be separated and processed by different processing entities. Scheme rules and rules in licensing agreements or other contracts leading to a restriction on the freedom to choose a processor shall be prohibited.

Amendment  38

Proposal for a regulation

Article 7 – paragraph 4

Text proposed by the Commission

Amendment

4. Processing entities within the Union shall ensure that their system is technically interoperable with other systems of processing entities within the Union through the use of standards developed by international or European standardisation bodies. In addition, processing entities shall not adopt or apply business rules that restrict interoperability with other processing entities within the Union.

4. By ...* processing entities within the Union shall ensure that their system is technically interoperable with other systems of processing entities within the Union through the use of standards developed by international or European standardisation bodies. In addition, processing entities shall not adopt or apply business rules that restrict interoperability with other processing entities within the Union.

 

4a. After consulting an advisory panel as referred to in Article 41 of Regulation (EU) No 1093/2010a and in order to ensure consistent harmonisation of this Article, EBA shall develop draft regulatory technical standards establishing requirements to be complied with by payment systems, payment schemes and processing entities to ensure a fully open and competitive card processing market.

 

EBA shall submit those draft regulatory technical standards to the Commission by ...**

 

Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.

 

The requirements referred to in the first subparagraph shall enter into force by ...*** and shall be updated on a regular basis as appropriate.

 

________________

 

* OJ please insert date: one year after the date of entry into force of this Regulation.

 

** OJ please insert date…

 

*** OJ please insert date: two years after the date of entry into force of this Regulation.

Amendment   39

Proposal for a regulation

Article 7 – paragraph 4 b (new)

Text proposed by the Commission

Amendment

 

4b. Member States may exempt newly established card-based payment schemes from applying this Article for a limited period of time by way of derogation from Articles 1 to 4b after consulting the Commission.

Justification

It is important to remember newly created payment schemes, which will be exposed to high costs for their business activity, disproportional to their vulnerable market position against already existing major card schemes. Such provision, for a limited period of time would help to build effective competition environment on the market of card based payment transactions.

Amendment  40

Proposal for a regulation

Article 8 – paragraph 1

Text proposed by the Commission

Amendment

1. Any schemes rules and rules in licensing agreements that hinder or prevent an issuer from co-badging two or more different brands of payment instruments on a card, telecommunication, digital or IT device shall be prohibited.

1. Any schemes rules and rules in licensing agreements or measures of equivalent effect that hinder or prevent an issuer from co-badging two or more different brands of payment instruments on a card, telecommunication, digital or IT device shall be prohibited.

Amendment  41

Proposal for a regulation

Article 8 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. When entering into a contractual agreement with a payment services provider, the consumer may decide to have two or more different brands of payment instruments on a payment card, telecommunication, digital or IT device. In good time before the contract is signed, the payment service provider shall provide the consumer with clear and objective information on all the payment brands available and their characteristics, including their functionality, cost and security.

Amendment  42

Proposal for a regulation

Article 8 – paragraph 2

Text proposed by the Commission

Amendment

2. Any difference in treatment of issuers or acquirers in schemes rules and rules in licensing agreements concerning co-badging on a card, telecommunication, digital or IT device shall be objectively justified and non-discriminatory.

2. Any difference in treatment of issuers or acquirers in schemes rules and rules in licensing agreements concerning co-badging or equivalent co-residing of different brands or applications on a card, telecommunication, digital or IT device shall be objectively justified and non-discriminatory.

Amendment  43

Proposal for a regulation

Article 8 – paragraph 3

Text proposed by the Commission

Amendment

3. Payment card schemes shall not impose reporting requirements, obligations to pay fees or other obligations with the same object or effect on card issuing and acquiring payment services providers for transactions carried out with any device on which their brand is present in relation to transactions for which their scheme is not used.

3. Payment card schemes shall not impose reporting requirements, obligations to pay fees or similar obligations with the same object or effect on card issuing and acquiring payment services providers for transactions carried out with any device on which their brand is present in relation to transactions for which their scheme is not used.

Amendment  44

Proposal for a regulation

Article 8 – paragraph 4

Text proposed by the Commission

Amendment

4. Any routing principles aimed at directing transactions through a specific channel or process and other technical and security standards and requirements with respect to the handling of more than one payment card brand on a card, telecommunication, digital or IT device shall be non-discriminatory and shall be applied in a non-discriminatory manner.

4. Any routing principles or equivalent measures aimed at directing transactions through a specific channel or process and other technical and security standards and requirements with respect to the handling of more than one payment card brand or equivalent on a card, telecommunication, digital or IT device shall be non-discriminatory and shall be applied in a non-discriminatory manner.

Amendment  45

Proposal for a regulation

Article 8 – paragraph 6

Text proposed by the Commission

Amendment

6. Payment card schemes, issuers, acquirers and payment card handling infrastructure providers shall not insert automatic mechanisms, software or devices on the payment instrument or at equipment applied at the point of sale which limit the choice of application by the payer when using a co-badged payment instrument.

6. Payment card schemes, issuers, acquirers and payment card handling infrastructure providers shall not insert automatic mechanisms, software or devices on the payment instrument or on equipment applied at the point of sale which limit the choice of application by the payer and the payee when using a co-badged payment instrument. Payees shall retain the option of installing automatic mechanisms in the equipment used at the point of sale which make a priority selection of a particular brand or application. However, payees shall not prevent the payer, for the categories of cards or related payment instruments accepted by the payee, from overriding an automatic priority selection made by the payee in its equipment.

Amendment  46

Proposal for a regulation

Article 9 – paragraph 1

Text proposed by the Commission

Amendment

1. Acquirers shall offer and charge payees individually specified merchant service charges for different categories and different brands of payment cards unless merchants request in writing acquiring payment services providers to charge blended merchant services charges.

1. Acquirers shall offer and charge payees individually specified merchant service charges for different categories and different brands of payment cards with different interchange fee levels unless merchants request in writing acquiring payment services providers to charge blended merchant services charges.

Amendment  47

Proposal for a regulation

Article 10 – paragraph 1

Text proposed by the Commission

Amendment

1. Payment schemes and payment service providers shall not apply any rule that may oblige payees accepting cards and other payment instruments issued by one issuing payment service provider within the framework of a payment instruments scheme to also accept other payment instruments of the same brand and/or category issued by other issuing payment service providers within the framework of the same scheme, except if they are subject to the same regulated interchange fee.

1. Payment schemes and payment service providers shall not apply any rule that may oblige payees accepting cards and other payment instruments issued by one issuing payment service provider within the framework of a payment instruments scheme to also accept other payment instruments of the same brand and/or category issued by other issuing payment service providers within the framework of the same scheme, except if they are subject to the same interchange fee which, moreover, complies with the caps set under this Regulation.

Justification

This amendment makes it clear that a merchant who accepts payment card A with an interchange payment below the cap imposed is required to accept payment card B only if exactly the same interchange payment applies to it. It is not enough, therefore, that both payment cards should entail an interchange payment below the imposed cap. This also enables the merchant to stimulate competition among the regulated caps by refusing a given payment card.

Amendment  48

Proposal for a regulation

Article 10 – paragraph 4

Text proposed by the Commission

Amendment

4. Issuing payment service providers shall ensure that their payment instruments are visibly and electronically identifiable, enabling payees to identify unequivocally which brands and categories of prepaid, debit, credit or commercial cards or card based payments based on these are chosen by the payer.

4. By ...* , issuing payment service providers shall ensure that their payment instruments are electronically identifiable, and, in the case of their newly issued card-based payment instruments, also visibly identifiable, enabling payees and payers to identify unequivocally which brands and categories of prepaid, debit, credit or commercial cards or card based payments based on these are chosen by the payer.

 

________________

 

* OJ please insert date: once year after the entry into force of this Regulation.

Amendment  49

Proposal for a regulation

Article 11 – paragraph 3

Text proposed by the Commission

Amendment

3. Paragraphs 1 and 2 are without prejudice to the rules on charges, reductions or other steering set out in Article 55 of the proposal COM (2013)547 and in Article 19 of Directive 2011/83/EU22 .

3. Paragraphs 1 and 2 of this Article are without prejudice to the rules on charges, reductions or other steering set out in Article 55 of Directive 2014/.../EU [PSD and in Article 19 of Directive 2011/83/EU22 .

__________________

__________________

22 Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights…

22 Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council.

Justification

It is important to clarify that the reference should not be to the rules proposed by the Commission, but to the final text.

Amendment  50

Proposal for a regulation

Article 12 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. When entering into a contractual agreement with a payment services provider, the consumer shall also be provided with clear and objective periodical information about the payment characteristics and payment fees applied to payment transactions.

Amendment  51

Proposal for a regulation

Article 14 – paragraph 1

Text proposed by the Commission

Amendment

1. Member States shall lay down rules on the sanctions applicable to infringements of this Regulation and shall take all measures necessary to ensure that they are applied. Such sanctions shall be effective, proportionate and dissuasive.

1. Member States shall lay down rules on penalties applicable to infringements of this Regulation and shall take all measures necessary to ensure that they are applied. EBA may issue guidelines in accordance with Article 16 of Regulation (EU) No 1093/2010 in order to ensure that those penalties are effective, proportionate and dissuasive.

Amendment  52

Proposal for a regulation

Article 15 – paragraph 1

Text proposed by the Commission

Amendment

1. Member States shall establish adequate and effective out-of-court complaint and redress procedures for the settlement of disputes arising under this Regulation between payees and their payment service providers. For those purposes, Member States shall designate existing bodies, where appropriate, or establish new bodies.

1. Member States shall establish independent, adequate and effective out-of-court complaint and redress procedures for the settlement of disputes arising under this Regulation between payees and their payment service providers. For those purposes, Member States shall designate existing bodies, where appropriate, or establish new bodies. Payment service providers shall adhere to at least one alternative dispute resolution body.

Amendment  53

Proposal for a regulation

Article 15 – paragraph 2

Text proposed by the Commission

Amendment

2. Member States shall notify the Commission of those bodies by two years after the entry into force of this Regulation. They shall notify the Commission without delay of any subsequent change concerning those bodies.

2. Member States shall notify the Commission of those bodies by ... *[two months after the entry into force of this Regulation]. They shall notify the Commission without delay of any subsequent change concerning those bodies.

Amendment  54

Proposal for a regulation

Article 15 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. Member States shall ensure that payment service providers participate in complaints procedures pursuant to paragraph 1.

Amendment  55

Proposal for a regulation

Article 16 – paragraph 1

Text proposed by the Commission

Amendment

Four years after the entry into force of this Regulation, the Commission shall present to the European Parliament and to the Council a report on the application of this Regulation. The Commission's report shall look in particular at the appropriateness of the levels of interchange fees and at steering mechanisms such as charges, taking into account the use and cost of the various means of payments and the level of entry of new players and new technology on the market.

By ...* , the Commission shall submit to the European Parliament and to the Council a report on the application of this Regulation. The Commission's report shall look in particular at the appropriateness of the levels of interchange fees and at steering mechanisms such as charges, taking 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 assessment should, in particular, consider:

 

(a) the development of cardholder fees;

 

(b) the level of competition among payment card providers and schemes;

 

(c) the effects on costs for the payer and the payee;

 

(d) the levels of merchant pass-through of the reduction in interchange levels;

 

(e) the technical requirements and its implications for all the parties involved;

 

(f) the effects of co-badging on user-friendliness, in particular for the elderly and other vulnerable users.

 

The report by the Commission shall, if appropriate, be accompanied by a legislative proposal that may include a proposed amendment of the maximum cap for interchange fees.

 

_______________

 

* OJ please insert date: two years after the entry into force of this Regulation.

(1)

Not yet published in the Official Journal.

(2)

Not yet published in the Official Journal.


OPINION of the Committee on the Internal Market and Consumer Protection (13.2.2014)

for the Committee on Economic and Monetary Affairs

on the proposal for a regulation of the European Parliament and of the Council on interchange fees for card-based payment transactions

(COM(2013)0550 – C7-0241/2013 – 2013/0265(COD))

Rapporteur: Adam Bielan

SHORT JUSTIFICATION

One of the indicators of a country's economic development is the level of non-cash transactions in the market. Statistics show that developed countries are also leaders in online payments or cards issuing and a variety of financial services is accessible for all citizens. These countries actively promote the use of payment card systems for buying goods and services on-line while making the consumers choice broader and contributing to a well-functioning economy. Cashless transactions play a crucial role in the functioning of economies because they are a quick, safe and innovative, One of the key practices hindering the achievement of an integrated European market is the widespread use of 'four party' schemes, which is translated in the market by the existence of so-called Multilateral Interchange Fees (MIFs). These are collectively agreed inter-bank fees usually between the acquiring payment service providers and the issuing payment service providers belonging to a certain scheme. Such interchange fees paid by acquiring payment service providers form part of the fees they charge to merchants, who in turn pass them on to consumers. Thus, high Interchange Fees paid by merchants result in higher final prices for goods and services. It needs to be noted that consumers are often unaware of the fees paid by the merchants and at the same time various incentives are used by issuers to encourage them towards the use of such payment instruments which generate higher fees for issuing payment service providers. Interchange fees also restrict market entry as their revenues for issuing payment service providers function as a minimum threshold to convince issuing payment service providers to issue payment cards or other payment instruments, such as online and mobile payment solutions, offered by new entrants. Finally, the variety of interchange fees applied within national and international payment card schemes gives rise to market fragmentation and prevents retailers and consumers from enjoying the benefits of the internal market.

The proposed regulation will improve the conditions for the functioning and development of the internal market in payments. Barriers identified by the Commission for further integration of the internal market in payments and appropriate approach to solve this problem will contribute to positive economic effects for the EU. The proposal is divided into two main parts. The first part introduces rules on interchange fees. With regard to such fees the proposal creates a 'regulated' and a 'non-regulated' area. The regulated area consists of all card transactions that are widely used by consumers and therefore difficult to refuse by retailers, i.e. consumer debit and credit card, and card based payment transactions. The non-regulated area consists of all payment card transactions and card based payment transactions based on those that fall outside the regulated area including cards issued by three party schemes.

In light of the above, it is desirable that adequate conditions for the development of card acceptance network be established within the EU, which is undoubtedly the aim of the proposed Regulation on interchange fees for card based payment transactions. Most certainly, the adoption of Union-wide caps on interchange fees for internal and cross-border transaction constitutes an important step towards improving the functioning of the internal market as well as the realisation of the principle of free movement of goods, persons, services and capital in the EU with a specific focus on the consumer. Although the Rapporteur acknowledges the idea of introduction of caps on interchange fees in Chapter II of this Regulation, he restricts himself the right to introduce further changes to articles 3 and 4 of the proposed Regulation.

However, it is essential that adequate means be provided to ensure the effectiveness of the proposed regulation, which will prevent the circumvention of the proposed prohibition. The Rapporteur is convinced that in line with Commission's principle of technological neutrality, as indicated in the Digital Agenda, this Regulation should apply to card based payment transactions regardless of the environment in which the transactions take place, including through retail payment instruments and services which can be off-line, on-line or transactions executed with commercial cards.

The market of payment transactions undergoes rapid changes, therefore the Rapporteur believes the review clause of article 16 should be shortened to allow to the Commission, and, if appropriate, to legislators a timely examination of the application of this Regulation taking into account new market developments, the level of entry of new players and newly accessible technologies. The Rapporteur wishes to draw attention in this respect to the fact that innovative mobile payments, which rise in the market are justifiably not covered by the proposed Regulation and the development of such innovative instruments should also be looked at in the report referred to in article 16.

Finally, the Rapporteur believes that newly created payment card schemes, which can be exposed to high costs for the business activity, not proportional to the vulnerable market position against already existing major card schemes, should have a possibility to be exempted from the application of Article 7 of this Regulation, for a limited period of time, following the decision of a Member State and after the consultation with the Commission. This would help to build effective competition environment in the market of card based payment transactions.

AMENDMENTS

The Committee on the Internal Market and Consumer Protection calls on the Committee on Economic and Monetary Affairs, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1

Proposal for a regulation

Recital 7

Text proposed by the Commission

Amendment

(7) Preparation of legislation is under way in several Member States21 to regulate interchange fees, covering a number of issues, including caps on interchange fees at various levels, merchant fees, the Honour All Cards rules or steering measures. The existing administrative decisions in some Member States vary significantly. In view of the harmfulness of interchange fees to retailers and consumers, a further introduction of regulatory measures at national level aimed at addressing the level or divergencies of these fees is anticipated. Such national measures would be likely to lead to significant barriers to the completion of the internal market in the area of cards, internet and mobile payments based on cards and would therefore hinder the freedom to provide services.

(7) Preparation of legislation is under way or already completed in several Member States21 to regulate interchange fees, covering a number of issues, including caps on interchange fees at various levels, merchant fees, the Honour All Cards rules or steering measures. The existing administrative decisions in some Member States vary significantly. In view of the harmfulness of interchange fees to retailers and consumers, a further introduction of regulatory measures at national level aimed at addressing the level or divergencies of these fees is anticipated. Such national measures would be likely to lead to significant barriers to the completion of the internal market in the area of cards, internet and mobile payments based on cards and would therefore hinder the freedom to provide services.

__________________

__________________

21 Italy, Hungary, Poland and the United Kingdom .

21 Italy, Hungary, Poland and the United Kingdom .

Amendment  2

Proposal for a regulation

Recital 10

Text proposed by the Commission

Amendment

(10) One of the key practices hindering the functioning of the internal market in card and card-based payments is the widespread existence of interchange fees, which are in most Member States not subject to any legislation. Interchange fees are inter-bank fees usually applied between the card-acquiring payment service providers and the card-issuing payment service providers belonging to a certain card scheme. Interchange fees are a main part of the fees charged to merchants by acquiring payment service providers for every card transaction. Merchants in turn incorporate these card costs in the general prices of goods and services. Competition between card schemes appears in practice to be largely aimed at convincing as many issuing payment service providers (e.g. banks) as possible to issue their cards, which usually leads to higher rather than lower interchange fees on the market, in contrast with the usual price disciplining effect of competition in a market economy. Regulating interchange fees would improve the functioning of the internal market.

(10) One of the key practices hindering the functioning of the internal market in card and card-based payments is the widespread existence of interchange fees, which are in most Member States not subject to any legislation. Interchange fees are inter-bank fees usually passed from card-acquiring payment service providers to card-issuing payment service providers belonging to the relevant scheme. Interchange fees are a main component of the fees charged to merchants by acquiring payment service providers for every card transaction. Merchants in turn incorporate these card costs in the general prices of goods and services. Competition between card schemes appears in practice to be largely aimed at convincing as many issuing payment service providers (e.g. banks) as possible to issue their cards, which usually leads to higher rather than lower interchange fees on the market, in contrast with the usual price disciplining effect of competition in a market economy. Regulating interchange fees would improve the functioning of the internal market.

Amendment  3

Proposal for a regulation

Recital 15

Text proposed by the Commission

Amendment

(15) This Regulation follows a gradual approach. As a first step, it is necessary to take measures to facilitate cross-border issuing and acquiring of payment card transactions. Allowing merchants to choose an acquirer outside their own Member State ('cross border acquiring') and imposing a maximum level of cross border interchange fees for cross border acquired transactions should provide the necessary legal clarity. In addition, licences for issuing or acquiring of payment instruments should be valid without geographic restrictions within the Union. These measures would facilitate the smooth functioning of an internal market for card, internet and mobile payments, to the benefit of consumers and retailers.

(15) In order to facilitate the smooth functioning of the internal market for card, internet and mobile payments to the benefit of consumers and retailers, it is necessary to take measures to facilitate cross-border issuing and acquiring of payment card transactions. Allowing merchants to choose an acquirer outside their own Member State ('cross border acquiring') and imposing a maximum level of interchange fee for both cross border and domestic acquired transactions should provide the necessary legal clarity. In addition, licences for issuing or acquiring of payment instruments should be valid without geographic restrictions within the Union.

Amendment  4

Proposal for a regulation

Recital 16

Text proposed by the Commission

Amendment

(16) As a consequence of unilateral undertakings and commitments accepted in the framework of competition proceedings, many cross-border card payment transactions in the Union are already carried out respecting the maximum interchanges fees applicable to the first phase of this Regulation. Therefore, the provisions relating to those transactions should enter into force quickly, creating opportunities for retailers to seek cheaper acquiring services cross-border, and incentivising domestic banking communities or schemes to lower their acquiring fees.

(16) As a consequence of unilateral undertakings and commitments accepted in the framework of competition proceedings, many cross-border card payment transactions in the Union are already carried out respecting the maximum interchanges fees. In order to provide for fair competition in the market of acquiring services all the provisions relating to domestic and cross-border card based transactions should enter into force at the same time and within a reasonable period to allow sufficient time for market adaptation.

Amendment  5

Proposal for a regulation

Recital 17

Text proposed by the Commission

Amendment

(17) For domestic transactions, a transition period is necessary to provide payment services providers and schemes with time to adapt to the new requirements. Therefore, after a two year period following the entry into force of this Regulation and in order to provide for a completion of an internal market for card-based payments, the caps on interchange fees for consumer card transactions should be extended to cover all, cross-border and domestic payments.

(17) It is necessary to introduce a transition period to provide payment services providers and schemes with time to adapt to the new requirements. Therefore, after a one year period following the entry into force of this Regulation and in order to provide for a completion of an internal market for card-based payments, the caps on interchange fees should apply.

Amendment  6

Proposal for a regulation

Recital 23

Text proposed by the Commission

Amendment

(23) It is important to ensure that the provisions concerning the interchange fees to be paid or received by payment service providers are not circumvented by alternative flows of fees to issuing payment services providers. To avoid this, the net compensation of fees paid and received by the issuing payment service provider from a payment card scheme should be considered as the interchange fee. When calculating the interchange fee, for the purpose of checking whether circumvention is taking place the total amount of payments or incentives received by an issuing payment services provider from a payment card scheme with respect to the regulated transactions less the fees paid by the issuing payment services provider to the scheme should be taken into account. Payments, incentives and fees considered could be direct (i.e. volume-based or transaction-specific) or indirect (including marketing incentives, bonuses, rebates for meeting certain transaction volumes).

(23) It is important to ensure that the provisions concerning the interchange fees to be paid or received by payment service providers are not circumvented by alternative flows of fees to issuing payment services providers. To avoid this, the "net compensation" of fees paid and received by the payment service provider from a payment card scheme should be considered as the interchange fee. When calculating the interchange fee, for the purpose of checking whether circumvention is taking place the total amount of payments or incentives received by a payment services provider from a payment card scheme with respect to the regulated transactions less the fees paid by the payment services provider to the scheme should be taken into account. Payments, incentives and fees considered could be direct (i.e. volume-based or transaction-specific) or indirect (including marketing incentives, bonuses, rebates for meeting certain transaction volumes, or various processing and licencing fees which do not constitute a direct income of the payment service provider). Moreover gains resulting from programmes conducted jointly by card issuers and payment service providers and issuers' profits resulting from payment card based transactions executed under the agreement with another card issuer should also be included while determining if any circumvention of provisions of this Regulation took place.

Justification

The precision is useful for reasons of clarity as issuer is not always an acquirer. Moreover, it should be clarified what other net profits the provision of Article 5 applies to.

Amendment  7

Proposal for a regulation

Recital 24

Text proposed by the Commission

Amendment

(24) Consumers tend to be unaware of the fees paid by merchants for the payment instrument they use. At the same time, a series of incentivising practices applied by issuing payment service providers (such as travel vouchers, bonuses, rebates, charge backs, free insurances, etc.) may steer consumers towards the use of payment instruments generating high fees for issuing payment service providers. To counter this, the measures imposing restrictions on interchange fees should only apply to payment cards that have become mass products and merchants generally have difficulty refusing due to their widespread issuance and use (i.e. consumer debit and credit cards). In order to enhance effective market functioning in the non-regulated parts of the sector and to limit the transfer of business from the regulated to the non-regulated parts of the sector, it is necessary to adopt a series of measures, including separation of scheme and infrastructure, steering of the payer by the payee and enable selective acceptance of payment instruments by the payee.

(24) Consumers tend to be unaware of the fees paid by merchants for the payment instrument they use. At the same time, a series of incentivising practices applied by issuing payment service providers (such as travel vouchers, bonuses, rebates, charge backs, free insurances, etc.) may steer consumers towards the use of payment instruments generating high fees for issuing payment service providers. In order to enhance effective market functioning it is necessary to adopt a series of measures, including separation of scheme and infrastructure, steering of the payer by the payee and enable selective acceptance of payment instruments by the payee.

Amendment  8

Proposal for a regulation

Recital 29

Text proposed by the Commission

Amendment

(29) The Honour all Cards Rule is a twofold obligation imposed by issuing payment services providers and payment card schemes on payees to, on the one hand, accept all the cards of the same brand (Honour all Products - element), irrespective of the different costs of these cards, and on the other hand irrespective of the individual issuing bank which has issued the card (Honour all Issuers –element). It is in the interest of the consumer that for the same category of cards the payee cannot discriminate between issuers or cardholders, and payments schemes and payment service providers can impose such obligation on them. Therefore, although the Honour all Issuers element of the Honour all Cards Rule is a justifiable rule within a payment card system, since it prevents that payees from discriminating between the individual banks which have issued a card, the Honour all Products element is essentially a tying practice that has the effect of tying acceptance of low fee cards to acceptance of high fee cards. A removal of the Honour all Products element of the Honour All Cards Rule would allow merchants to limit the choice of payment cards they offer to low(er) cost payment cards only, which would also benefit consumers through reduced merchants' costs. Merchants accepting debit cards would then not be forced also to accept credit cards, and those accepting credit cards would not be forced to accept commercial cards. However, to protect the consumer and his ability to use the payment cards as often as possible, merchants should be obliged to accept all cards that are subject to the same regulated interchange fee. Such a limitation would also result in a more competitive environment for cards with interchange fees not regulated under this Regulation, as merchants would gain more negotiating power as regards the conditions under which they accept such cards.

(29) The Honour all Cards Rule is a twofold obligation imposed by issuing payment services providers and payment card schemes on payees to, on the one hand, accept all the cards of the same brand ('Honour all Products' - element), irrespective of the different costs of these cards, and on the other hand irrespective of the individual issuing bank which has issued the card ('Honour all Issuers' –element). It is in the interest of the consumer that for the same category of cards the payee cannot discriminate between issuers or cardholders, and payments schemes and payment service providers can impose such obligation on them. Therefore, although the 'Honour all Issuers' element of the Honour all Cards Rule is a justifiable rule within a payment card system, since it prevents that payees from discriminating between the individual banks which have issued a card, the 'Honour all Products' element is essentially a tying practice that has the effect of tying acceptance of low fee cards to acceptance of high fee cards. A removal of the 'Honour all Products' element of the Honour All Cards Rule would allow merchants to limit the choice of payment cards they offer to low(er) cost payment cards only, which would also benefit consumers through reduced merchants' costs. Merchants accepting debit cards would then not be forced also to accept credit cards. However, to protect the consumer and his ability to use the payment cards as often as possible, merchants should be obliged to accept all cards that are subject to the same regulated interchange fee.

Amendment  9

Proposal for a regulation

Recital 31

Text proposed by the Commission

Amendment

(31) In order to ensure that redress is possible where this Regulation has been incorrectly applied, or where disputes occur between payment services users and payment services providers, Member States should establish adequate and effective out-of-court complaint and redress procedures. Member States should lay down rules on the penalties applicable to infringements of this Regulation and should ensure that those penalties are effective, proportionate and dissuasive and that they are applied.

(31) In order to ensure that redress is possible where this Regulation has been incorrectly applied, or where disputes occur between payment services users and payment services providers, Member States should establish adequate and effective out-of-court complaint and redress procedures. Member States, following guidelines set up by the European Banking Authority, should lay down rules on the penalties applicable to infringements of this Regulation and should ensure that those penalties are effective, proportionate and dissuasive and that they are applied.

Amendment  10

Proposal for a regulation

Article 1 – paragraph 1

Text proposed by the Commission

Amendment

1. This Regulation lays down uniform technical and business requirements for payment card transactions carried out within the Union, where both the payer's payment service provider and the payee's payment service provider are established therein.

1. This Regulation lays down uniform technical and business requirements for card based payment transactions carried out within the Union, where both the payer's payment service provider and the payee's payment service provider are established therein.

Justification

The wording needs to be clarified to be in line with Commission's principle of technological neutrality, as indicated in the Digital Agenda and in Recital 21, 'this Regulation should apply to card based payment transactions regardless of the environment in which this transaction takes place, including through retail payment instruments and services which can be off-line, on-line or mobile'.

Amendment  11

Proposal for a regulation

Article 1 – paragraph 3 – point a

Text proposed by the Commission

Amendment

(a) transactions with commercial cards,

deleted

Justification

There is no economic justification for different treatment of commercial cards.

Amendment  12

Proposal for a regulation

Article 1 – paragraph 3 – point c

Text proposed by the Commission

Amendment

(c) transactions with cards issued by three party payment card schemes.

(c) transactions with cards issued under three party payment card schemes.

Amendment  13

Proposal for a regulation

Article 2 – point 4

Text proposed by the Commission

Amendment

(4) debit card transaction means an card payment transaction included with prepaid cards linked to a current or deposit access account to which a transaction is debited in less than or 48 hours after the transaction has been authorised/initiated.

(4) 'debit card transaction' means a card payment transaction including prepaid cards linked to a current or deposit access account to which a transaction is debited immediately and in any case no longer than within two business days after the receipt of the payment order by the issuer.

Amendment  14

Proposal for a regulation

Article 2 – point 5

Text proposed by the Commission

Amendment

(5) credit card transaction means an card payment transaction where the transaction is settled more than 48 hours after the transaction has been authorised/initiated;

(5) 'credit card transaction' means a card payment transaction where a transaction is debited in more than two business days after the receipt of the payment order by the issuer;

Amendment  15

Proposal for a regulation

Article 2 – point 6

Text proposed by the Commission

Amendment

(6) ‘commercial card’ means any payment cards issued to undertakings or public sector entities that are limited in use for business expenses of employees or civil servants or cards issued to self-employed natural persons engaged in a business activity that are limited in use for business expenses of those self-employed natural persons or their employees;

deleted

Justification

The definition is not necessary since commercial cards are to be covered by the Regulation.

Amendment  16

Proposal for a regulation

Article 2 – point 12 a (new)

Text proposed by the Commission

Amendment

 

(12 a) 'payment card' means any payment card - debit or credit - which entitles the cardholder to access cardholder's funds, or enables the cardholder to make a payment through the intermediation of an acquirer and which is accepted by a payee in order to process a payment transaction;

Justification

The term 'payment card' is used in the proposal on multiple occasions, for reasons of clarity it seems necessary to provide for such definition.

Amendment  17

Proposal for a regulation

Article 2 – point 15

Text proposed by the Commission

Amendment

(15) three party payment card scheme means a payment card scheme in which payments are made from a payment account held by the scheme on behalf of the cardholder to a payment account held by the scheme on behalf of the payee, and card based transactions based on the same structure. When a three party payment card scheme licenses other payment service providers for the issuance and/or the acquiring of payment cards, it is considered as a four party payment card scheme;

(15) 'three party payment card scheme' means a payment card scheme in which payments are made from a payment account held by the scheme on behalf of the payer to a payment account held by the scheme on behalf of the payee, and card based transactions based on the same structure. When a three party payment card scheme licenses other payment service providers for the issuance and/or the acquiring of payment cards, or issues payment cards with a co-brand partner or through an agent, it is considered as a four party payment card scheme;

Amendment  18

Proposal for a regulation

Article 3 – title

Text proposed by the Commission

Amendment

Interchange fees for cross-border consumer debit or credit card transactions

Interchange fees for cross-border and domestic consumer debit or credit card based payment transactions

Amendment  19

Proposal for a regulation

Article 3 – paragraph 1

Text proposed by the Commission

Amendment

1. With effect from two months after the entry into force of this Regulation, payment services providers shall not offer or request for cross-border debit card transactions a per transaction interchange fee or other agreed remuneration with an equivalent object or effect of more than 0,2 % of the value of the transaction.

1. With effect from one year after the entry into force of this Regulation, payment services providers shall not offer or request for debit card based payment transactions a per transaction interchange fee or other agreed remuneration with an equivalent object or effect of more than 0,2 % of the value of the transaction.

Amendment  20

Proposal for a regulation

Article 3 – paragraph 2

Text proposed by the Commission

Amendment

2. With effect from two months after the entry into force of this Regulation, payment services providers shall not offer or request for cross-border credit card transactions a per transaction interchange fee or other agreed remuneration with an equivalent object or effect of more than 0,3 % of the value of the transaction.

2. With effect from one year after the entry into force of this Regulation, payment services providers shall not offer or request for credit card based payment transactions a per transaction interchange fee or other agreed remuneration with an equivalent object or effect of more than 0,3 % of the value of the transaction.

Amendment  21

Proposal for a regulation

Article 3 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. Member States shall be able to maintain or introduce lower caps or measures of equivalent object or effect through national legislation.

Justification

The MIFs cap should not result in current domestic schemes or new entrants with lower MIFs to increase these to the level of the cap. The proposed cap should not harm well-functioning national markets which will only have a detrimental impact on consumers.

Amendment  22

Proposal for a regulation

Article 4 – title

Text proposed by the Commission

Amendment

Interchange fees for all consumer debit or credit card transactions

deleted

Amendment  23

Proposal for a regulation

Article 4 – paragraph 1

Text proposed by the Commission

Amendment

1. With effect from two years after the entry into force of this Regulation, payment service providers shall not offer or request a per transaction interchange fee or other agreed remuneration with an equivalent object or effect of more than 0,2 % of the value of the transaction for any debit card based transactions.

deleted

Amendment  24

Proposal for a regulation

Article 4 – paragraph 2

Text proposed by the Commission

Amendment

2. With effect from two years after the entry into force of this Regulation, payment service providers shall not offer or request a per transaction interchange fee or other agreed remuneration with an equivalent object or effect of more than 0,3 % of the value of the transaction for any credit card based transactions.

deleted

Amendment  25

Proposal for a regulation

Article 5 – paragraph 1

Text proposed by the Commission

Amendment

For the purposes of the application of the caps referred to in Article 3 and Article 4, any net compensation received by an issuing bank from a payment card scheme in relation to payment transactions or related activities shall be treated as part of the interchange fee.

For the purposes of the application of the caps referred to in Article 3 and Article 4, any net compensation received by a payment service provider from a payment card scheme in relation to payment transactions or related activities shall be treated as part of the interchange fee. The acquirer should only be charged the amount as stipulated in this regulation.

Justification

In order to prevent payment card schemes from increasing charges like licensing, authorisation etc. which would then be passed on to retailers and consumers, the regulation should be clarified.

Amendment  26

Proposal for a regulation

Article 7 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a. Member States may provide, by way of derogation and having consulted the Commission that this article does not apply to newly established card based payment schemes for a limited period of time.

Justification

It is important to remember about the newly created payment schemes, which will be exposed to high costs for their business activity, unproportional to their vulnerable market position against already existing major card schemes. Such provision, for a limited period of time would help to build effective competition environment on the market of card based payment transactions.

Amendment  27

Proposal for a regulation

Article 8 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. When entering into a contractual agreement with a payment service provider, the consumer shall be given the possibility to decide whether or not he needs two or more different brands of payment instruments on his card, telecommunication, digital or IT device. Before signing the contract, the payment service provider shall provide the consumer with clear and objective information on the payment brands available and their characteristics related to use, functionalities, cost and security.

Amendment  28

Proposal for a regulation

Article 8 – paragraph 6

Text proposed by the Commission

Amendment

6. Payment card schemes, issuers, acquirers and payment card handling infrastructure providers shall not insert automatic mechanisms, software or devices on the payment instrument or at equipment applied at the point of sale which limit the choice of application by the payer when using a co-badged payment instrument.

6. Payment card schemes, issuers, acquirers, merchants and payment card handling infrastructure providers shall not insert automatic mechanisms, software or devices on the payment instrument or at equipment applied at the point of sale which limit the choice of application by the payer when using a co-badged payment instrument.

Amendment  29

Proposal for a regulation

Article 9 – paragraph 1

Text proposed by the Commission

Amendment

1. Acquirers shall offer and charge payees individually specified merchant service charges for different categories and different brands of payment cards unless merchants request in writing acquiring payment services providers to charge blended merchant services charges.

1. Acquirers shall offer and charge payees individually specified merchant service charges for different categories and different brands of payment cards with different interchange fee levels unless merchants request in writing acquiring payment services providers to charge blended merchant services charges.

Amendment  30

Proposal for a regulation

Article 9 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. Any reduction in interchange fees under Articles 3 and 4 of this Regulation or decided on by the competent authorities referred to under Article 13 must be accompanied by an at least equivalent reduction in merchant service charges payable by recipients to acquiring service payment providers.

Justification

This regulation will have no impact if acquirers fail to pass on interchange fee reductions to merchants.

Amendment  31

Proposal for a regulation

Article 12 – paragraph 2

Text proposed by the Commission

Amendment

2. Contracts between acquirers and payees may include a provision that the information referred to in the first subparagraph of paragraph 1 shall be provided or made available periodically, at least once a month, and in an agreed manner which allows payees to store and reproduce information unchanged.

2. Contracts between acquirers and payees shall include a provision that the information referred to in the first subparagraph of paragraph 1 shall be provided or made available periodically, at least once a month, and in an agreed manner which allows payees to store and reproduce information unchanged.

Amendment  32

Proposal for a regulation

Article 12 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. When entering into a contractual agreement with a payment services provider, the consumer shall also be provided with clear and objective periodical information about the payment characteristics and payment fees applied to payment transactions.

Amendment  33

Proposal for a regulation

Article 14 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a.The European Banking Authority shall be in charge of issuing guidelines for effective, proportionate and dissuasive sanctions

Justification

It would be important for all Member States to go in the same direction when laying down rules on the sanctions applicable to infringements of this Regulation in order to ensure level playing field.

Amendment  34

Proposal for a regulation

Article 15 – paragraph 1

Text proposed by the Commission

Amendment

1. Member States shall establish adequate and effective out-of-court complaint and redress procedures for the settlement of disputes arising under this Regulation between payees and their payment service providers. For those purposes, Member States shall designate existing bodies, where appropriate, or establish new bodies.

1. Member States shall establish independent, adequate and effective out-of-court complaint and redress procedures for the settlement of disputes arising under this Regulation between payees and their payment service providers. For those purposes, Member States shall designate existing bodies, where appropriate, or establish new bodies.

Amendment  35

Proposal for a regulation

Article 15 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. Payment service providers shall adhere to one or more Alternative Dispute Resolution bodies.

Amendment  36

Proposal for a regulation

Article 16

Text proposed by the Commission

Amendment

Four years after the entry into force of this Regulation, the Commission shall present to the European Parliament and to the Council a report on the application of this Regulation. The Commission's report shall look in particular at the appropriateness of the levels of interchange fees and at steering mechanisms such as charges, taking into account the use and cost of the various means of payments and the level of entry of new players and new technology on the market.

Two years after the entry into force of this Regulation, the Commission shall present to the European Parliament and to the Council a report on the application of this Regulation. The Commission's report shall look in particular at the appropriateness of the levels of interchange fees and at steering mechanisms such as charges, taking into account the use and cost of the various means of payments, the level of entry of new players and new technology on the market and the impact on the functioning of the internal market of implicit interchange fees applied within three party payment card schemes and, if necessary, present a legislative proposal seeking to alleviate possible negative effects thereof.

Justification

It is necessary that the Commission examines the first impacts of the Regulation on the payment market sooner than after four years since this market undergoes rapid developments.

Three party payment fees can be substantial, far exceeding those applicable to four party payment cards. It is therefore necessary to investigate their impact on internal market transactions and the need to adopt legislation in this area.

PROCEDURE

Title

Interchange fees for card-based payment transactions

References

COM(2013)0550 – C7-0241/2013 – 2013/0265(COD)

Committee responsible

       Date announced in plenary

ECON

8.10.2013

 

 

 

Opinion by

       Date announced in plenary

IMCO

8.10.2013

Rapporteur

       Date appointed

Adam Bielan

25.9.2013

Discussed in committee

27.11.2013

23.1.2014

10.2.2014

 

Date adopted

11.2.2014

 

 

 

Result of final vote

+:

–:

0:

37

1

0

Members present for the final vote

Adam Bielan, Preslav Borissov, Sergio Gaetano Cofferati, Birgit Collin-Langen, Lara Comi, Anna Maria Corazza Bildt, António Fernando Correia de Campos, Cornelis de Jong, Vicente Miguel Garcés Ramón, Evelyne Gebhardt, Małgorzata Handzlik, Eduard-Raul Hellvig, Philippe Juvin, Sandra Kalniete, Edvard Kožušník, Toine Manders, Hans-Peter Mayer, Phil Prendergast, Mitro Repo, Robert Rochefort, Zuzana Roithová, Heide Rühle, Christel Schaldemose, Andreas Schwab, Catherine Stihler, Róża Gräfin von Thun und Hohenstein, Bernadette Vergnaud, Barbara Weiler

Substitute(s) present for the final vote

Emma McClarkin, Roberta Metsola, Konstantinos Poupakis, Olle Schmidt, Olga Sehnalová, Gabriele Stauner, Jutta Steinruck, Wim van de Camp, Patricia van der Kammen

Substitute(s) under Rule 187(2) present for the final vote

Christian Engström


PROCEDURE

Title

Interchange fees for card-based payment transactions

References

COM(2013)0550 – C7-0241/2013 – 2013/0265(COD)

Date submitted to Parliament

24.7.2013

 

 

 

Committee responsible

       Date announced in plenary

ECON

8.10.2013

 

 

 

Committee(s) asked for opinion(s)

       Date announced in plenary

IMCO

8.10.2013

 

 

 

Rapporteur(s)

       Date appointed

Pablo Zalba Bidegain

10.9.2013

 

 

 

Discussed in committee

5.11.2013

17.12.2013

12.2.2014

 

Date adopted

20.2.2014

 

 

 

Result of final vote

+:

–:

0:

26

0

5

Members present for the final vote

Marino Baldini, Jean-Paul Besset, Sharon Bowles, George Sabin Cutaş, Rachida Dati, Leonardo Domenici, Diogo Feio, Ildikó Gáll-Pelcz, Jean-Paul Gauzès, Sven Giegold, Sylvie Goulard, Liem Hoang Ngoc, Syed Kamall, Jürgen Klute, Hans-Peter Martin, Alfredo Pallone, Antolín Sánchez Presedo, Olle Schmidt, Peter Simon, Theodor Dumitru Stolojan, Kay Swinburne, Sampo Terho, Corien Wortmann-Kool, Pablo Zalba Bidegain

Substitute(s) present for the final vote

Fabrizio Bertot, Herbert Dorfmann, Bas Eickhout, Sari Essayah, Ashley Fox, Sophia in ‘t Veld, Olle Ludvigsson, Thomas Mann, Catherine Stihler, Nils Torvalds, Emilie Turunen

Substitute(s) under Rule 187(2) present for the final vote

Marta Andreasen

Date tabled

11.3.2014

Last updated: 20 March 2014Legal notice