EU backs bank fee rise to boost euro payment area

EU Competition Commissioner Neelie Kroes said: "It may prove necessary to have a multilateral interchange fee for cross-border SEPA direct debits in the very initial stage. But we will have to be convinced that these fees will be strictly limited in time and objectively justified - that they are for example not aimed at providing additional profits to banks."

Internal Market Commissioner Charlie McCreevy stated: "The SEPA direct debit scheme is one of the key elements in establishing a single euro payment area. It offers enormous potential for individuals and businesses to manage cross-frontier payments on the basis of a single bank account. Most national direct debit schemes are free and I would expect that the introduction of SEPA direct debits would not involve any increase in fees for customers."

European Central Bank Executive Board Member Gertrude Tumpel-Gugerell stated: "It would not be acceptable that bankers are not able to deliver the SEPA direct debits by November 2009. A European solution has to be found by the banks which are also agreeable to the competition authorities. In this respect, the idea of maintaining at national level the same interchange fee for national legacy and SEPA schemes during a limited transitional phase should facilitate the rolling out of the SEPA direct debit scheme. This would also ensure the necessary level playing-field in the national context for the SEPA direct debit scheme and the national legacy direct debit schemes".

Gerhard Huemer, director for economic and fiscal policy at UEAPME, the association of the European small and medium enterprises, commented: "Multilateral interchange fees can be acceptable only if they are transparent and if it is demonstrated that they are strictly necessary. At the moment this has not been proven yet," he told EurActiv, warning of the extra charges that companies might be forced to pay.

Anne Fily, an economics officer at BEUC, the European consumer organisation, commented on the Commission's green light for multilateral interchange fees by telling EurActiv: "Even if it is only for the short term, it is not a good signal to consumers". On direct debit in general, she added: "We are still wondering where the consumer's interest lies in switching from well-functioning national systems to SEPA."

The European Banking Federation did not have any comment to make. The European Savings Banks Group (ESBG) "regrets the announcement by the European Central Bank and the European Commission that a default interchange fee for direct debit transactions will not be permissible “after a short transition period”. Although the relevant information had been available to the Commission since October 2006, this position communicated a year prior to a possible launch of the SEPA Direct Debit Scheme will impact all payment services both in terms of pricing transparency and innovation", reads a statement.