On 8 June 2015, Regulation (EU) 2015/751 of the European Parliament and of the Council on interchange fees for card-based payment transactions entered into force. In this legal circular, we have prepared a brief summary of the most significant changes and impacts that the said Regulation brings.

Regulation of the Level of Interchange Fees The Regulation newly introduces regulation of interchange fees for transactions carried out by consumer payment cards, that is, fees which the bank of the cardholder (consumer) charges to the merchant’s bank for a payment transaction. At present, the level of these fees is mostly determined on the basis of an agreement between banks or on the basis of so-called card schemes, whilst according to data available to the European Commission, the current average level of interchange fees in the Czech Republic is approximately 1.2%.

The Regulation stipulates that with effect from 9 December 2015, interchange fees may be charged at a maximum of 0.2% in the case of payment by debit card and at a maximum of 0.3% in the case of payment by credit card. With regard to the current level of these fees in the Czech Republic, the reduction will be relatively significant.

The said limitation applies only to so-called four-party payment schemes (e.g. MasterCard and Visa). The Regulation, conversely, with exceptions, will not apply to so-called three-party card schemes (e.g. Diners Club or American Express) or to transaction fees which the acquiring bank charges to the merchant. In the case of domestic payment transactions, national legislation may provide for minor derogations from the above-mentioned limits (e.g. a combination of a percentage limit with a fixed amount up to 5 cents).

It follows from the above that the regulation should lead to a reduction in costs for merchants and to an increase in their motivation to accept payment cards. The European Commission estimates a total reduction in expenditure on interchange fees for merchants of up to 6 billion euros annually. In connection with the reduction of interchange fees, however, there arises a risk that banks will seek other sources of income and will charge more for their other services.

Other Changes • The Regulation newly prohibits any rules which restrict or exclude the possibility of placing two or more payment schemes on a payment card. Issuers of payment cards will thus be newly directly authorised by law to place the brands of multiple card schemes on payment cards.

• Merchants will newly not be obliged to accept all payment cards issued within one card scheme, with the exception of payment cards to which the same interchange fee applies. With regard to the newly introduced regulation of interchange fees, the above means that if, for example, a merchant decides to accept debit payment cards of a particular scheme, he will not be obliged to accept credit cards of the same scheme.

• The Regulation prohibits any territorial restrictions applied within card schemes or licensing agreements which concern the issuing of payment cards or the acceptance of card transactions. Individual payment cards should therefore be universally usable in any EU Member State.

• The Regulation prohibits any measures applied within card schemes or licensing agreements which would restrict or reduce the motivation of consumers to use payment cards.

David Svoboda

Law Firm Mašek, Kočí, Aujezdský www.e-Advokacie.cz – on-line legal advisory services

This text was originally prepared by the law firm Mašek, Kočí, Aujezdský in cooperation with the Association for Electronic Commerce (APEK) as legal circular No. 9/2015 intended for members of this association.

This text was translated from Czech to English using an AI translator.