Attitudes to Interchange Fees

European retailers within high value credit card sectors* say they support EU legislation to regulate the cost of payment card acceptance covering all payment cards equally.

A new poll finds that 55% of retailers in a selection of high value credit card sectors across six European countries believe that a new rule currently being considered by European policymakers, which would create a cap on merchant fees across bank cards in the EU, should be applied to all credit card networks, including American Express and Diners Club.

The poll conducted by global research company Ipsos on behalf of MasterCard Worldwide arrives as European policymakers consider new legislation that would involve creating new inflexible interchange rates across Europe and would change how payment cards are used by consumers and accepted by retailers.

The poll surveyed 901 ‘high value retailers’ via telephone between 15 April and 9 May 2014 in six countries: France, Germany, Great Britain, Italy, Poland and Spain.

Among retailers in a selection of high value credit card sectors, knowledge of interchange rates is fairly high; more than three in four (79%) high value retailers report that they know “a lot” or “a fair amount” about the different fees charged for different payment methods.

Support for a cap on interchange rates

High value retailers were asked to consider a new proposal that would create a cap on interchange rates for the use of Visa and MasterCard anywhere in the EU, while exempting American Express and Diners Club, in particular. In essence, the proposed legislation would mean potential caps on the rates for use of some payment cards but not others.

However, this approach is unpopular with a majority of European high value retailers surveyed.  Overall, 55% across all countries indicate that they would support EU legislation to regulate the costs of payment card acceptance only if it included all card networks such as American express and Diners’ Cards versus 34% who would support legislation if it excluded some credit card payments (such as American Express or Diners Club).

Support for the proposed legislation to include all payment cards is highest in Germany (66%) followed by Spain (65%), Italy (59%), France (53%), Poland (44%) and Great Britain (42%).

Use of payment cards and associated fees

Around two in three (63%) high value retailers across 6 European countries accept American Express cards. American Express is also rated as having the highest payment charge fees overall; 69% rate American Express’ fees as ‘very or fairly high’ followed by 47% rating MasterCard’s fees as high and 46% rating Visa’s fees as high.

Despite assertions that American Express rates are on balance, higher than for MasterCard or Visa; these same retailers are no more satisfied with the services and process than they are with other card brands with perceived lower fees such as MasterCard and Visa. 

Satisfaction rates for American Express are slightly lower than those for Visa and on par with MasterCard; 57% of high value retailers claim that they are very or somewhat satisfied with the processes and support received from American Express, with 60% satisfied with MasterCard’s support and 61% with Visa’s support.

Acceptance of payment cards following legislation

Should the proposed legislation come into effect, 50% of high value retailers across all countries, claim that they would continue to accept all payment methods while 31% say they would stop accepting the most expensive payment cards.

How the money saved would be used

When asked how they would use any money saved from a cap on interchange fees, 59% of high value retailers across all countries surveyed claim that it would be used to innovate or invest in their business rather than to reduce retail prices for their customers (an option favored by 15%).

Countries where retailers are most likely to use the money saved to innovate their business, in ranked order are France (69%), Spain (64%), Germany (61%), Poland (61%), Italy (51%) and Great Britain (50%).

Only a relatively small number of high value retailers in each country claim that they would reduce retail prices for their customers, in ranked order, Spain is the most likely to do so (20%), followed by Italy (19%), Poland (17%), Great Britain (16%), France (8%) and Germany (8%).

Interest in further education and training

Finally, two in five (40%) high value retailers would also welcome training on fraud risk mitigation to help better understand the processes associated with debit or credit cards.

Countries which would find this most helpful, in ranked order, are Germany (49%), France (46%), Poland (41%), Great Britain (34%), Italy (33%) and Spain (33%).

Download the facta and reports for each market:

• France: Attitudes to Interchange Fees Factum
• France: Attitudes to Interchange Fees Report
• France: les attitudes envers l'interchange
• Germany: Attitudes to Interchange Fees Factum
• Germany: Attitudes to Interchange Fees Report
• Deutschland: Standpunkte zum Interbankenegelt
• Great Britain: Attitudes to Interchange Fees Factum
• Great Britain: Attitudes to Interchange Fees Report
• Italy: Attitudes to Interchange Fees Factum
• Italy: Attitudes to Interchange Fees Report
• Italia: opinioni sulle commissioni interbancarie
• Poland: Attitudes to Interchange Fees Factum
• Poland: Attitudes to Interchange Fees Report
• Polska: oplaty interchange w oczach duzych detalistów
• Spain: Attitudes to Interchange Fees Factum
• Spain: Attitudes to Interchange Fees Report
• España: actitudes sobre las tasas de intercambio en España
• EU: Attitudes to Interchange Fees Factum
• EU: Attitudes to Interchange Fees Report

Methodology

These are findings of research conducted by global research company Ipsos on behalf of MasterCard Worldwide.

The research was conducted via telephone among high value retailers defined as:

• Decision makers regarding payment card transactions
• Working within a retail sector related to travel, entertainment or luxury goods such as airline ticket sales, car rental agency, hotel/resort, travel management company/travel agency, petrol stations, restaurant, theater, museum/gallery, jewelry shop, department store and other high value stores
• Have high value single transactions made frequently in branch via payment cards

The following field dates and sample sizes in each country:

Respondents were provided with background on the issue of interchange rates.

“As you may be aware, there is a cost to the retailer for all payment types that are made whether they are cash, payment cards or cheques. And, when a retailer decides they want to offer customers the ability to pay with credit, debit or pre-paid cards, they negotiate an agreement with a bank to process those payments via a secure network for a fee known as an interchange fee. Interchange helps pay for the secure network, fraud protection, purchase guarantees, value retailers receive from accepting cards, ongoing innovations and customer service. The companies that develop and maintain the technology of the networks set the default interchange rates for using their systems.”