Europe Investigating Differences In Local Credit Card Practices
LONDON -- The European Community has set an investigation into international payments systems such as Visa and Eurocard-MasterCard because of differing practices among member banks in various countries.
The action comes in response to a study critical of the range of currency exchange services available to tourists, with major differences identified in the cost of converting money when vacationing within the 12-nation European Community.
The community's consumer affairs commissioner, Karel Van Miert, said that the findings show the importance of moving toward full economic and monetary union in the community.
The study, by the European Bureau of Consumers Unions, found that tourists from northern Europe fare better by exchanging their money on arrival in southern holiday spots.
Conversely, people in southern Europe often do better by exchanging currency in their own country before vacationing elsewhere.
Specially prepared for the community's Executive Commission, the inquiry looked at services offering currency exchange facilities like travelers checks, credit cards, international postchecks, and Eurocheques.
It found that conditions applying to foreign exchange transactions using Visa and Eurocard-MasterCard credit cards differ "very significantly" from one country to another.
In a given country, a member bank may apply the general network rates or set its own rates and commission.
"This would not be a problem if precise information were available to cardholders, allowing them to compare different means of payment especially for cost," the researchers said. "But information to cardholders is not satisfactory."
Commissioner Van Miert has sent copies of the study to international card firms, asking them to explain discrepancies between general rules and actual practices in European countries.
The study was also critical of travelers checks, often said by issuing establishments to be widely accepted in most countries.
"In fact, the real situation is less attractive," it said.