MasterCard Polska has rejected The Central
Bank of Poland’s accusations that it compromised attempts to drive
uptake of card payments in the country through lowering interchange
rates.
The National Bank of Poland said on Tuesday
that by not signing up to its proposals to cut interchange fees
over the next five years.
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MasterCard said it did not sign the agreement
because market forces and not central decisions should determine
interchange fees.
“I think that the times when the prices of
goods and services in Poland were determined top-down became
history over 20 years ago,” said Michał Skowronek, director general
for MasterCard Polska.
However, the network did confirm that it
intends to lower some of its interchange rates in 2013 anyway.
“Our decision is clear evidence that market
forces – in this particular case, the banks, clearing agents and
merchants who voiced their readiness to reduce the interchange fees
– have an actual impact on the process of making business
decisions.”
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By GlobalData“We have already acted and are now waiting for
the competition to decide on their next steps,” Skowronek
added.
The bank was attempting to negotiate a
voluntary deal with the major card networks, proposing a gradual
reduction of interchange rates in the country from the
current 1.6-1.7% to the European average of 0.7% for debit cards
and 0.8% for credit cards by 2017.
MasterCard would not disclose the exact new
rates that will enter into effect as of January 2013, but said it
will reduce its interchange fees by an average of 11.6% for credit
and of 28.2% for debit.
Domino effect
MasterCard’s rejection of the central bank’s
proposals caused a competition domino effect, with Visa also coming
down on MasterCard for the failure of the deal before announcing
that it would recommend its member banks reduce interchange rates
for Visa payments.
Visa said in a statement it recommends
“adjusting fees to the realities of the market and allowing
continued competitiveness. Visa Europe will also be taking other
market measures aiming to fullfill as many of the Programme’s
recommendations as possible”.
“We will present the new rate proposals to
banks at our earliest opportunity, so that the Visa Polska
Executive Committee can take the relevant decisions by the end of
September 2012 and the new rates can be introduced in practice not
later than provided for in the Programme, which means by 1 January
2013,” Visa Europe said.
Visa emphasised their view that MasterCard’s
refusal to enter into the agreement means that the programme to
reduce card fees in Poland, cannot be implemented.
“We deplore that this is not what has actually
happened,” said Visa in an official statement.
However, MasterCard said it did not sign
the agreement because it did not believe the multilateral agreement
would help achieve the objective of increasing the number of card
payments in Poland.
According to MasterCard, the premise on which
the programme is based is wrong. The network said that that a steep
reduction of interchange fees will lead to an increase in the
number of card transactions, but “various studies have shown that
the low level of card usage in Poland is due more to consumer
behaviour than merchants’ willingness to accept cards, therefore it
is important that interchange fees remain at levels that encourage
consumers to pay with cards rather than cash,” MasterCard said in a
statement.
“Lowering interchange fees reduces the cost to
merchants but increases the cost to consumers. Therefore, it is
important that any change in interchange fee rates continues to
balance the interests of both consumers and retailers, so that each
party pays its fair share of the costs for the benefits it
receives.”
The National Bank of Poland said it would have
to resort to legislation in order to lower interchange fees. But
MasterCard Polska cast doubts over the legality of the agreement,
suggesting it may be anti-competitive and in violation of consumer
protection law, however it is still awaiting clarifications on the
issue.
