Due to several parties being involved in payment card transactions, there is an incentive to set the fees for the use of these payment card schemes (interchange fees) above an economically reasonable level. These increased costs are then often incorporated into the prices of goods and services, which is detrimental to consumers, and they may also hinder or prevent (cross-border) providers with lower interchange fees from entering the market.
Other provisions of the Regulation are intended to boost and stimulate competition:
- Prohibition of any territorial restrictions in relation to the issuing of payment cards and the acquisition of card-based payment transactions
- Obligation to separate payment card schemes and processing entities
- Prohibition of co-badging two or more different payment brands or payment applications on payment instruments
- Transparency rules
- Options for traders to steer consumers towards the use of cheaper payment schemes.
To enable proper enforcement of the IEVG, the AFCA will be allowed to fill three additional permanent posts.
Prosecution of breaches
The AFCA will sanction any breaches of the obligations arising from the Regulation by imposing administrative penalties. Sanctions against legal entities may mean fines of up to 10% of that entity’s total turnover generated in the preceding business year, in accordance with cartel law provisions.