Today’s European Parliament vote on the capping of costs of all credit and debit cards across Europe was passed following an overwhelming yes vote. Trade unions across the EU expressed feelings of delight and appreciation inasmuch as Member States were allowed to set even lower caps than the statutory maximum through their country-specific financial services regulation.
This is expected to bring considerable savings for retailers and better prices for consumers across the whole of the EU, but is also expected to account for a modest, but non-trivial hit on payment services providers’ profit and loss accounts. In line with normal EU practice, the legislative package will now go to the European Council, following which it will have to be ratified during a second reading in the European Parliament. Given the upcoming European Parliament elections in May, ratification will be the responsibility of a newly elected parliament. Several trade unions across the EU have called on the European Council, and particularly the upcoming Italian Presidency, to implement the financial services regulation reforms required to bring this reform to fruition with urgency. They have argued that this regulation is going to be a fundamental first step for the future development and for the competitiveness of the payments sector within Europe, with great potential of bringing vast benefits to Europe’s merchants and consumers. It has also been argued that this development will facilitate and foster intra-EU trade by lowering the transactions costs associated with cross-border payments, but the same argument is also extendible to domestic trade as credit and debit cards are used for domestic purchases as well.
During the same Plenary session, in addition to financial services regulation targeting European credit and debit cards, the European Parliament also voted on roaming charges. More information on this is available here.
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