European cross-border fees and the new framework for national interchange rates became law today, making debit and credit transactions more competitive for retailers and their customers, thanks – in part – to years of hard work by the Travel Retail Fair Payment Alliance its leader Jacques Parsons – also Chairman of Kappé International at Amsterdam Schiphol Airport.

 

The FPA says that the new Interchange Fee regulations apply from today and will and various new rules will be incorporated over the year, with the most relevant and important for travel retailers relating to the Multilateral Interchange Fee or ‘MIF’.

 

 

The lobby group says that these are now capped at 0.2% for debit transactions or 0.3% for credit transactions and these rates now apply immediately for cross-border transactions. The same rates will also be applied to domestic transactions from December 2015 and these will also include an alternative €0.5c debit cap to offer some flexibility for smaller payments.

 

One of the other major victories for the FPA is that the new law ‘both creates and obliges a lot more transparency’ from the card schemes. It defines various technical requirements more clearly, such as ‘un-blending of different fees contained in the Merchant Service Charge statement’ and offers more information regarding transactions. The new law also simplifies previous ‘burdensome rules’ and sets a review clause to ensure that the new law delivers.

 

 

BRINGING THE BANKS TO ACCOUNT

Importantly, the new law also introduces tough anti-circumvention rules to avoid the interchange law being broken. At the same time the MIF regulation enters into Force, the FPA says that it is its understanding that the other half of the Payments Package, the Payments Services Directive reform (PSDII), which covers aspects such as surcharging, has just been adopted in Brussels. The FPA expects that Directive to be agreed by the European Parliament and published by the end of October.

 

Commenting on the victory on what has been a long hard battle, Jacques Parson, who also chairs the Dutch Retail Association’s Payment Systems Committee, said: “I have to smile because when I started this campaign many told me it was doomed to failure. Yet here we are with a law enshrining lower fees, which we must remember are the ceiling; Member States can go lower, or even zero should they wish.

 

“This is the result of a lot of hard work and I should like to pay tribute to those in our FPA network that worked with us. I also pay tribute to our allies, such as Euro Commerce, which launched the original complaint many years ago and the European Commission for sticking resolutely to their task and not taking easy options in front of pressure from the card schemes and banks.

 

 

INDUSTRY MUST FAMILIARISE ITSELF

“This is a major step for our business, but we must be vigilant. We must not sit back after all our hard work to get us this far. We have to ensure we are ready to profit from the new rules for us and our customers. The industry must be alert to the introduction of new payment technologies, such as Apple Pay and Android Pay and their ‘tokenisation’ systems.

 

“We certainly must make sure this new regulation is doing what it says on the tin and that our overall charges are coming down. I invite anyone that is unsure of the benefits or wants to take further action to contact me for more information.”

 

Jacques Parson can be reached at Kappé International, (Tel) +31 (20) 4058451; GSM: +31 (65330) 4826; (E-mail) [email protected]