|
European Commission Decision on Multilateral Interchange Fees
The Wall Street Journal Europe
“By ignoring that wide choice already exists, [European Commissioner Neelie] Kroes is able to slap down these ‘inflated’ fees in the name of consumer protection without explaining – or perhaps fully understanding – how card users might be harmed with the elimination of the fee.”
“Brussels Prices” (Editorial, January 11, 2008)
Read the complete article >
The Wall Street Journal Europe
“Whether society will benefit remains to be seen. A generalized ban on such fees would probably disturb a delicate balance in the market for payment cards. . . . .Reducing these fees might eliminate undue profits, if there are any, but the resource costs are real and need to be covered. Consumers would then be forced to pick up some of the cost burden from retailers.”
--Leo Van Hove, Associate Professor of Economics, Vrije Universiteit Brussel, “Regulating in the Dark” (January 3, 2008)
Read the complete article >
Financial Times (London)
“I doubt whether retailers’ motives for banning interchange are wholly altruistic. In Australia, where interchange fees have been regulated since 2004, there are no signs that retailers are passing on the fee reduction to consumers. Indeed, the cost of credit has increased as banks have sought other ways to recoup the costs of running a payment system.”
--Merlin Stone (Professor of Marketing, Bristol Business School), “Retailers’ Motives on Interchange Are Not Altruistic” (Letter to the Editor, December 27, 2007)
Read the complete article >
The Wall Street Journal (Also appeared in WSJ Asia and WSJ Europe on January 2, 2008)
“By asking merchants to pay a fair price for the significant benefits they receive, interchange keeps costs low for cardholders. With the EC’s ruling, European consumers shouldn’t expect to see lower prices when they shop. . . . Instead, consumers will more likely see their card benefits diminish and the costs of card usage increase.”
--Joshua Peirez (MasterCard Worldwide), “EU Killing of Interchange Fees Won’t Help Customers” (Letter to the Editor, December 28, 2007)
Read the complete article >
Financial Times (Asia)
“Whether in Europe or the U.S., I fail to see the wisdom of a government policy that limits competition, stunts the development of more advanced payment systems, and distorts a functioning marketplace in favor of one industry. In the face of tightening global credit markets, reducing the availability of credit and raising its costs—two of the inevitable consequences of interchange regulation—is not prudent public policy.”
--Camden Fine, President and Chief Executive, Independent Community Bankers of America, “A Price Cap on Interchange Has the Stamp of a Greek Tragedy” (Letter to the Editor, December 27, 2007)
Read the complete article >
MasterCard Worldwide Response to EC Decision
“MasterCard Europe believes that it has strong grounds for its appeal. The company said that its decision to appeal is based on its firm convictions that market forces, not regulation, should drive key decisions such as the setting of interchange fees and retailers’ choices over which forms of payment to accept.”
Read entire statement here >
MasterCard Worldwide Press Release Regarding Effects of EC Decision
“On a typical credit card transaction of 50 euros, a merchant pays about fifty cents. For a debit transaction, the cost is half that rate. In return, merchants receive enormous benefits—more sales, guaranteed payment, protection from theft and fraud, and highly satisfied customers. But now, if the Commission gets its way, those costs will be shifted to consumers.”
Read entire press release here >
Statement from the American Bankers Association
“ABA is disappointed in today’s ruling by the European Commission. . . . By accepting cards for payment, retailers get faster, guaranteed payments, enhanced security and protection against fraud, greater convenience, and increased sales. Interchange fees are simply the means by which retailers pay to receive those benefits.”
Read entire statement here >
Statement from Chris Stinebert, President and Chief Executive Officer, American Financial Services Association (AFSA)
“We believe interchange fees are a fair means to compensate card issuers for their role in the electronic systems that allow consumers to pay for goods and services. AFSA urges policymakers in the U.S. and other regions in Europe not to follow the EC’s action.”
Read entire statement here >
Visa Europe Statement
“Interchange is a mechanism for ensuring the maximum benefit to all who use card payment systems. Payment cards benefit both retailers and consumers. They help to reduce the costs of cash handling, improve security, speed up transaction times at checkouts, and in addition for retailers, boost their sales.”
Read entire statement here > |
