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Brussels targets bank card fees

Brussels targets bank card fees
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Having succeeded in slashing mobile phone roaming charges, the European Commission is reportedly going to try to cap the fees that banks charge retailers to process card payments.

The cap would apply initially for cross-border transactions – for example, when an Irish card-holder pays using their card in France.

But later it would be extended to fees on domestic payments using all cards.

Currently, debit card fees in some countries can be as high as 1.6 percent and for credit cards as high as 1.8 percent.

Brussels wants a limit of 0.2 percent on the value of a debit card transaction and 0.3 percent on credit card purchases.

Such a move could benefit consumers, as those fees are passed on to them in higher prices for goods and services.

It will not be popular with banks as the fees provide them with a major stream of revenue, but it could have been worse as some in the European Commission were pushing for a total ban on fees rather than a cap.

The European Commission also recommends rules that would make it easier for retailers to pick and choose which cards to accept, which would cut their transaction costs.

The plans will first have to be agreed with the European Parliament and EU countries, which means that the roll-out of the cap could begin from around the end of next year.