The E.U. continues to set the pace for swipe fee reform as the economic and monetary affairs committee of the European Parliament voted last week to cap the fees at 0.2% and 0.3% for debit cards and credit cards respectively. The new legislation, which applies to domestic and cross-border payments, was a response to the ongoing impact of the fees on both merchants and consumers as well as the lack of transparency in how such fees are set.
Right now, the average swipe fee ranges from 0.2 percent in Denmark and the Netherlands, to more than one percent in Germany, Hungary and Poland. The reform measures aims to standardize the governing rules between countries.
The European Commission states that the reduced fees could end up saving retailers six billion euros a year, a savings that could lead to lower consumer prices.
Despite the significant progress being made in Europe, the cost for U.S. consumers to swipe their cards remains exorbitant. In fact, the fees, which can be as much as four percent of the total cost of the purchase, are eight times higher here than in Europe and other countries.
So, the question remains: what gives? It’s time for our federal officials to follow the E.U.’s lead.
For more about the European Parliament’s recent vote, see
here and
here and
here.
Image source: The Travelers Blog
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