According to research by Ipsos MORI, commissioned by MasterCard, 15% of the 901 managers and owners involved in the study claimed they would pass the savings on to customers. Spanish merchants are the most likely to do so (20%), followed by Italy (19%), Poland (17%), the UK (16%) and France (8%).
Those surveyed were selected from sectors likely to have a high volume and value of credit card transactions, such as airline ticket sales, car rental agencies, restaurants, travel agents, hotels and resorts.
In July 2013, the European Commission proposed the revised Payment Services Directive, capping the fees at 0.3% of transaction value for credit cards and at 0.3% for credit cards. In April, MEPs amended the proposal to include business cards, which have higher fees than consumer cards. The amended law will be passed on to the next European Parliament. Should the proposed legislation come into effect, half of high- value retailers surveyed mentioned that they would continue to accept all payment methods, as compared to 31% who revealed plans to stop accepting the most expensive payment cards.
Furthermore, 55% of retailers involved in the research indicated they would support the cap only if it included all card networks, as compared to 34% said they would support the draft regulation in its current form.
Knowledge of interchange rates is fairly high among the retailers. More than three in four high value retailers claim they know “a lot” or “a fair amount” about the different fees charged for different payment methods.
The context:The payments, known as multilateral interchange fees or MIFs, have long been a subject of heated debate. The fees are charges during transactions between the merchant and buyer’s banks. According to the European Commission, interbank fees for card payments cost European retailers more than EUR 10 billion every year. These costs are often handed to consumers, which lead to higher prices.
The three-party card schemes, such as American Express and Diners Club, are currently largely excluded from the scope of the draft rules. In a three-party card scheme, the issuer of the card to the consumer and the acquirer, who has the relationship with the merchant, is the same body. The four-party model such as MasterCard has a separate issuer and acquirer. This has brought criticism from MasterCard, as the draft legislation includes the latter and Visa, but not all payment cards.
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