AirPlus Makes Changes After UK Commercial Card Ruling

A decision by the U.K. Payment Systems Regulator last month has now led corporate payment company AirPlus to change its operations, according to reports on Thursday (April 14).

AirPlus revealed that it will replace its individual pay corporate cards with cards that fall under the EU’s definition of a card product to which interchange fee caps apply. The EU ruled late last year that the regulation regarding those caps, which limit the fee at 0.3 percent per transaction, do not cover commercial cards, instead allowing individual Member States to decide whether the fee caps apply to these corporate cards.

The U.K. Payment Systems Regulator ruled last month that individual pay corporate cards are not considered commercial cards.

“The interchange fee caps … apply to all transactions, except commercial card transactions where the funds that are used to settle with the issuer come directly from the business account,” the U.K. regulator declared.

In response to the ruling, AirPlus Chairman Patrick Diemer announced that it will be replacing the corporate cards provided to individual pay customers — not considered commercial cards and, therefore, fall under the fee caps — with a card that is considered a commercial card and, therefore, is not subject to the interchange fee limits.

Reports said the decision is aimed at boosting revenue from these fees, which are likely to decline in the wake of the EU interchange fee cap decision.

The move follows failed lobbying by AirPlus and other payment companies in an effort to get U.K. regulators to consider individual pay corporate cards as commercial cards. Diemer said he expects other jurisdictions to make different conclusions as to the definition of a commercial card and if it’s subject to interchange fee limits.

According to reports, AirPlus will issue the new Travel Expense Cards in the U.K. and has already made the switch in Germany. Diemer told reporters that the company anticipates about half of its former individual pay customers to use the new travel card that charges swipe fees; the rest, he predicted, are likely to switch to a corporate pay arrangement.

Update: In an email to PYMNTS, an AirPlus spokesperson said the company had been “mis-quoted” in the original article published on BTN. “We have no comment on this topic at this time,” the spokesperson added. PYMNTS will update the story when a comment is released by AirPlus.