Insights & InterviewsChange to EU regulations creates huge opportunity for cutting payment card costs

Change to EU regulations creates huge opportunity for cutting payment card costs

Cross Border Acquiring rules brought in across the EU last year have led to a price war among acquirers, driving down transaction costs for merchants savvy enough to demand reductions from January 2015.

Cross Border Acquiring rules brought in across the EU last year have led to a price war among acquirers, driving down transaction costs for merchants savvy enough to demand reductions from January 2015.

As cash treasury management expert Jack Large explains, the regulation undercuts existing MSCs by allowing cross-border acquirers that have regulated operations outside a country to bid for domestic merchants using the 0.2% and 0.3% interchange. As a result, many merchant acquirers have responded by setting up regulated operations outside their home country, sparking a price war.

For companies subject to high transaction fees, the potential rewards are significant. The payment and technology consultants PSE Consulting estimate that an organisation processing €15m of payments across Europe could stand to save over €72,000 per year in fees.

Of course, not everyone is thrilled by the increase in price competition. According to PSE Consulting: “the concessions have generated the most disruptive challenge Europe’s acquirers have ever addressed ” and that “high credit card interchange countries such as the UK, Germany, Portugal and Sweden are very vulnerable and are most threatened by major reductions in interchange revenues.”

According to Large, merchants have already begun asking their acquirers for substantial reductions, effective as of January next year.

 

Related Articles

Talking about trends in treasury recruitment

Insights & Interviews Talking about trends in treasury recruitment

1w GTNews
Using neuroscience to create business change: SAP Ariba Live - Day 3

Insights & Interviews Using neuroscience to create business change: SAP Ariba Live - Day 3

3m Victoria Beckett
"The architecture of financial markets has changed": Stefan Bielmeier, DZ Bank

Automation "The architecture of financial markets has changed": Stefan Bielmeier, DZ Bank

5m Victoria Beckett
Treasury TV: Jill Harrison, Whitbread Plc

10 Minutes With The Treasury Treasury TV: Jill Harrison, Whitbread Plc

5m Victoria Beckett
Treasury TV: Yeng Butler compares US and European MMF reforms

Compliance Treasury TV: Yeng Butler compares US and European MMF reforms

5m Victoria Beckett
Treasury TV: Building a case for an improved financial system with blockchain

10 Minutes With The Treasury Treasury TV: Building a case for an improved financial system with blockchain

5m Victoria Beckett
Treasury TV: Tim de Knegt, The Port of Rotterdam

10 Minutes With The Treasury Treasury TV: Tim de Knegt, The Port of Rotterdam

6m Victoria Beckett
GTNews' 20th anniversary: The evolution of trade

Banking GTNews' 20th anniversary: The evolution of trade

6m GTNews