92001E1705

WRITTEN QUESTION E-1705/01

by Fernando Fernández Martín (PPE-DE) to the Commission

(14 June 2001)

Subject: Means of payment

The incidence of payment by credit card may be expected to increase considerably in the future: such payment will be a key instrument in the transition to the euro, since it will be vital for consumers' payments

and movements within the EU. However, in practice the banks oblige retailers to bear the costs of credit card transactions, while the rates of commission charged vary considerably from one Member State to another.

Can the Commission provide information on the different rates of commission charged by the banks in the Member States, and on any specific plans it may have for EU-wide harmonisation in this field?

Does the Commission intend to adopt, or has it already adopted, any special measures to alleviate the losses which will arise from the large-scale use of credit cards following the transition to the euro, for those retailers whose profit margin is non-elastic and who are therefore unable to pass on to the consumer the costs arising from credit card transactions (e.g. petrol pump operators and service stations)?

Can the Commission supply information on the compatibility with Community law of the rates of commission established by credit card companies and banks for each transaction and of the circumstance that these companies are in practice forcing retailers to bear the costs of credit card transactions?

Answer given by Mr Bolkestein on behalf of the Commission

(20 September 2001)

If a retailer wishes to accept payment by credit card, he has to enter into a contract with an acquiring bank. This contract specifies the rates to be charged to the retailer for the service (retail transaction fee).

In determining the retail transaction fee, the acquiring bank takes account of its costs (transaction processing costs, interchange fees, payment terminal maintenance costs, etc.) and its profit margin in the local competitive context. The actual retail transaction fees can therefore vary considerably from one Member State to the next.

The fact that acquiring banks charge a retail transaction fee for a service does not conflict with Community rules. The Commission does not intend to intervene in that competitive commercial process to regulate the amount charged to retailers for the service, nor is it the Commission's aim to harmonise the situation within the Community.

Nonetheless, the Commission feels that the introduction of the euro should also lead to a single payment area and therefore, on 25 July 2001, proposed a draft regulation laying down a principle of non-discrimination in charges for payments in euros. The implications of this, as far as the Honourable Member's question is concerned, are that the retailer must pay the same fee for all transactions, whether domestic or cross-border.