An external study published by the European Commission on Wednesday 11 March shows that the main objectives of the Interchange Fees Regulation (IFR) for card-based payment transactions have been achieved.
The study, commissioned by the Commission from an external contractor, shows that interchange fees for 'consumer cards' have decreased by 35% (around €2.6 billion per year) between 2015 and 2017.
This decrease has resulted in lower charges for retailers as well as benefits to consumers through lower retail prices. Furthermore, increased cross-border acquiring services and card transactions have led to a higher degree of market integration.
The IFR introduced a cap on interchange fees for card-based payment transactions as well as several provisions aimed at improving market transparency, competition and the functioning of the European single market.
Risk of reduction in benefits. The study notes, however, that acquisition margins and scheme fees for international card schemes have increased, reducing some of the benefits. If they continue to increase, “it may further reduce or eliminate the benefits of the IFR” say the study's authors. The IFR has facilitated entry into and competition in several payments markets, “but consumers and merchants do not seem yet to have reaped the full potential of the benefits”, the study concludes.
As provided for in the IFR, the Commission will present a report on the application of the Regulation later this year. The study will be one of the sources of information for the report, in addition to the comments made by stakeholders and the assessments carried out by the competent national authorities. Link to the study: http://bit.ly/39K5A2b (Original version in French by Lionel Changeur)