GozoNews.Com

The GRTU, Chamber of Small and Medium Enterprises, has said that a European Commission decision this week on debit and credit cards had shorn the government and regulatory authorities of any pretext they had against making the commercial banks remove the charges they impose on transactions with their cards. The EC’s decision, the GRTU said, fully justified its campaign on behalf of Maltese businesses.

According to the GRTU, the EC has decided that the MasterCard multilateral interchange fees (MIF) on cross border payments made in transactions in the European Economic Area, violated the treaty. In Malta, Belgium, Ireland, the Czech Republic, Latvia, Luxembourg and Greece, the decision applied also to cards for domestic payment. It added that the EC had concluded that MasterCard’s MIF, a charge imposed on all payments from any outlet when the payment is processed, had inflated the costs for retailers who accepted the card. MasterCard has now been given six months to remove the fees, and if it did not the EC could impose a fine of 3.5 per cent daily on its global turnover, the GRTU said.

The MIF is not illegal, but in the case of an open card scheme, as was the case in question, it is legal only if it contributes to technical and economic progress and where consumers benefited. No such factor related to the MasterCard case.

According to EU commissioner Neeli Kroes consumers ended paying twice - once in the form of the annual fee to the banks, and then when they paid at a shop, whether they paid through a card or in cash, because no such distinction could be made in shops. Retailers bound by their agreement with MasterCard were not allowed to explain the charges to consumers.

In Malta, retailers paid both the merchant service charge, as well as the MIF, ending paying Lm3 on every Lm100 in charges. MasterCard’s interchange fees, introduced in 1992, varied between 0.4 per cent and 1.2 per cent on each transaction, which was double the charges in Australia.

The GRTU appealed to the government and the regulators (the Malta Financial Services Authority and the Office of Fair Competition) to take action similar to the EC’s, so as to fulfill their obligations. As Malta is a member of the EU, business and consumers here are entitled to the same benefits existing in other countries, the GRTU argued.