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A European merchant-lobbying group Tuesday renewed its call for a cheap European debit scheme to counter international card brands that can cost more for businesses. EuroCommerce is advocating for a European debit card that charges 1 euro cent per transaction instead of a percentage of the transaction amount that business usually pay to accept payment cards. "There is no justification for ad valorem (i.e. percentage) fees. The processing cost does not vary with the amount of the transaction," Cécile Grégoire, the group's senior adviser on payment systems, tells CardLine Global. Grégoire says EuroCommerce has backed the debit idea for at least three years. With many European countries moving toward a common market for electronic payments under the Single Euro Payments area, however, and with concerns that the international card brands may be allowed to impose costly interchange rates on merchants, the group has decided to become "more vocal," especially as the deteriorating economy batters consumer spending, she says. Among the group's concerns is how European antitrust authorities ultimately will handle "multilateral" interchange rates charged by Visa and MasterCard. The cross-border rates charged by MasterCard were ruled illegal by the European Commission in December 2007, though the card company is appealing that decision. Antitrust authorities have launched a similar investigation of Visa Europe. Earlier this year, Peter Ayliffe, Visa Europe's CEO, said he hopes to reach a "negotiated settlement" on the issue by year's end (CardLine Global, 21 Jan.). The possibility of the settlement has caused anxiety for EuroCommerce and the BEUC, a Brussels-based consumer advocacy group that also supports the debit card idea. The two groups worry that the card companies and issuers will maintain or establish card rules that are relatively expensive.
