European Parliament Furthers Swipe-Fee Cap

The European Parliament has voted to shake up the landscape of commerce relating to credit and debit cards.

The Parliament has drafted new amendments to the rules in an effort to put a cap on payment processing fees, and to create better safeguards to protect consumers who shop online.

The new cap will be set at 0.3% of the transaction value with credit card payments, and the lesser of 0.2% or 7-euro cents for debit card transactions. This cap would be in effect for both domestic and cross-border payments a year after and if the rules are approved.

Parliament hopes to lower the cost of goods for retailers since merchants have an incentive to mark up their prices to offset these interchange fees. According to the European Commission, retailers pay €10 billion annually for accepting credit and debit cards.

As for online consumer protections, the European Parliament also voted for an increase in disclosure regarding consumer purchases. The rules would standardize the information that consumers receive, including contact information, time of purchase, and applicable exchange rates.

Parliament also set a 24-hour time limit on the reversal of unauthorized charges. However, clients may also be liable for loss or misuse of a stolen card for a maximum of €50.

The new European Parliament that will come to term in May can choose to further the work on these draft rules or scrap them entirely.