EU Interchange Regulation Impacting Corporate Payments Afterall

by Rick Hall 0

Apparently it does make sense to read the fine print, particularly when it comes to regulatory decisions. Despite the overtures at the end of the 2014 that corporate payments would be excluded from the pending cap on interchange fees in Europe, some rather ambiguous language omissions have prompted issuer AirPlus to notify its German corporate card customers of a pending transaction fee beginning in December.

According a recent article in Business Traveler News, inspection of the actual regulation led AirPlus to reassess its position and make the notification public. At this stage, it appears that only German corporate card customers with individual-pay agreements in which cardholders settle out of their private accounts and are then reimbursed by their employer will be impacted. According to the article, approximately 83% of AirPlus’ cardholders may be impacted by this fee. Quoted from a recent briefing on the issue, AirPlus managing director and chairman Patrick Diemer stated,

“The lobbying experts warned us throughout that if we didn’t pay attention, something could fall off the table at the last minute. At the last minute, the regulators made this change about individual-pay cards.” While the initial impression would be that would be disruptive to current cardholders, the company noted that it may not pose as significant of an issue financially to customers.
“It was to be somewhat expected that despite what we were hearing at the end of last year that this issue will not go away” noted Rick Hall, Director of Commercial and Enterprise Payments at Mercator Advisory Group. “The fact that there is some rather ambiguous language is not new but it can be terribly disruptive. Issuers need to have clarity around this issue in order to ensure compliance and to communicate effectively with their customers. This event could raise additional issues as other issuers and countries assess the impact of just what the removal of “or indirect” will have on business. This is more about transparency than it is about interchange-caps. The EU cannot afford to have a multi-country response and it will be an important series of events to follow.”

Overview by Rick Hall, Director of Commercial and Enterprise Payments at Mercator Advisory Group

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