Auditors Identify Flaws in EU Card Payment Pricing Regulations

Luxembourg (dpa) – A recent report from the European Court of Auditors suggests that consumers in the EU may face negative consequences due to existing regulations governing digital payment pricing.

Specifically, the EU has implemented bans on surcharges for card payments and transfers within the eurozone, alongside caps on transaction fees from card systems. These so-called price interventions aim to mitigate the adverse effects of unfair competition.

Lack of Oversight from the EU Commission

However, the European Commission does not have an obligation to routinely assess these price interventions, particularly regarding card fees, according to the criticism from the Luxembourg-based EU auditors. They noted a lack of clarity on whether these price interventions are justified or on their duration.

“In several instances related to card payment interventions, the European Commission has not been able to demonstrate that the positive impacts for consumers clearly outweigh the negatives,” stated Ildikó Gáll-Pelcz from the Court of Auditors. Poorly structured interventions could lead to inefficiencies among payment service providers, distort market supply and demand, and potentially harm both consumers and retailers.

Card Fee Expenses in the Billions

The value of digital payments, including card and smartphone transactions in retail across the EU, has more than doubled from 2017 to 2023, surpassing the €1 trillion mark in 2023. The auditors estimate that consumers incurred between €5 billion and €6 billion in card fees during the same year.

In Germany, cashless transactions have also become more prevalent, with approximately 61.8% of sales being paid by card in 2023, compared to just 42.6% a decade earlier, according to Statista.

The auditors further highlighted a knowledge gap regarding the effects of EU policies on digital payments, attributing this to the absence of an effective monitoring system established by the EU Commission.

Commission Responds to Concerns

The European Commission has acknowledged the significance of the issues raised by the auditors in an official response, indicating that many of the problems highlighted are already receiving attention. The European Court of Auditors routinely assesses the activities of EU institutions, especially the Commission, in its reports. While it cannot issue binding directives, its findings are taken into account during discussions about potential legal reforms. (January 9)