As European Union (EU) authorities continue to combat interchange fees charged by credit card companies Visa and Mastercard, some are now calling on such regulatory action to apply to corporate and commercial cards as well.
Reports in The Moodie Davitt Report on Friday (May 3) said that Jacques Parson, chairman of Netherlands professional services company Kappé International, is campaigning on behalf of the travel industry to remove interchange fees for cross-border card payments within Europe, along with other travel and retail companies.
The European Commission (EC) recently ruled in favor of a 40 percent reduction of interregional interchange fees charged by Visa and Mastercard, a ruling that reports said applies to non-EU consumer debit and credit cards used to make purchases across Europe. The Travel Retail Fair Payment Appliance applauded the decision, saying it will promote transparency in swipe fee costs.
However, the EC’s decision does not apply to corporate credit cards, a fact Parson said needs to be addressed.
“Overall, this is important news for a truly global shopping channel like travel retail, and I thank the [EC] for listening to our concerns,” he said in a statement. “But we must not sit back. The next steps are to address commercial cards and scheme fees within the EU’s current interchange fee legislation as part of the review process that is taking place at the moment.”
The Travel Retail Fair Payment Alliance expressed “some disappointment” that the EC did not include commercial cards in its decision.
Earlier this year, the EC issued a $648.3 million fine against Mastercard for allegedly artificially inflating the costs of card payments in the EU. Mastercard and Visa had both previously offered to cap interchange fees on card payments made by tourists while within the EU to end the EC’s antitrust investigation, and to expand the scope of interchange fee caps from EU cards to include non-EU cards as well.
Yet, the efforts have, so far, passed over the commercial card space, a concern for other players in the industry.
Also earlier this year, a group of retailers in the U.K. and Europe argued that the EC’s current interchange fee regulatory action should include commercial cards in its swipe fee limit requirements.
“A merchant doesn’t take your card off you and ask if it’s a commercial card, ask you where your card was issued,” said British Retail Consortium Head of Payments Policy Andrew Cregan during a conference in Germany earlier this year. “We need to have legislation that meets the needs of merchants in terms of the way they actually handle card payments.”