Corporate Card Surcharge Debate Left Up To EU States


While the European Union has decided to ban surcharges on card payments made by consumers, the matter as it relates to commercial card products is less clear.

Reports in Business Travel News published late last week said the European Commission will leave the decision up to each individual member state as to whether or not to extend the consumer card surcharge ban to corporate cards, too.

A ban on surcharges is part of the Payment Services Directive, also known as PSD2, adopted by EU officials last year.

In an email to the publication, European Commission Policy Officer of Financial Services Krzysztof Zurek said that the ban on surcharges applies to all purchases made with a card, whether it be online or off, including for cross-border purchases, when made with a consumer card product.

“The only category of payments that may be surcharged are payments with business/corporate credit cards and with cards issued by so-called three-party schemes, which are used in Europe mostly for business purposes,” he wrote.

But according to reports, because this is a directive, individual member states can decide whether corporate cards will also fall under the surcharge ban. The policy stems from previous EU regulations that cap the amount that credit card issuers can charge to merchants for interchange fees, which can be passed on to the end consumer. Reports said that the EU’s latest decision means that retailers are prohibited from passing those extra costs down to their customers.

Corporate cards were excluded from that swipe fee limit, and reports said that the language of the rules is unclear as to whether corporate cards fall under the surcharge ban.

Similar confusion and debate has emerged in the U.S. as regulators explore the implication of interchange fee caps and whether commercial cards should fall under those rules.