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The European Commission has been urged to address the issue of commercial cards, used increasingly by small businesses and the self-employed, attracting significantly higher charges than consumer cards.
Engin Eroglu, a German member of the European Parliament (MEP), has formally questioned the commission on the issue.
He highlighted concerns about the impact of these fees on businesses, particularly micro-enterprises and self-employed individuals who may unknowingly use commercial cards.
As it stands, the Interchange Fee Regulation (IFR), which was introduced in 2015 to instil lower and standardised interchange fees within the EU, currently applies only to consumer cards.
Under this framework, fees for consumer debit and credit cards are capped at 0.20 percent and 0.30 percent respectively.
However, commercial cards, those issued for business purposes rather than personal use, are exempt from these limits.
According to Eroglu, this exclusion has resulted in interchange fees of up to 2.30 percent for commercial card transactions, a stark contrast to the capped rates for consumer cards.
A growing problem
The use of commercial cards was initially primarily limited to large corporations, but their adoption has surged, particularly among small and medium-sized enterprises (SMEs).
Eroglu, who sits with the centrist Renew faction of the parliament, noted that in countries such as Italy, Croatia and Romania, commercial cards now account for 70-80 percent of card payments.
He also pointed out that their market share in Austria jumped from 3.5 percent in 2021 to 20 percent in 2023.
Eroglu’s inquiry to the commission seeks to determine whether EU regulators are aware of the issue and if they recognise it as an unfair information disadvantage for traders.
He also questioned whether the commission is considering capping fees on commercial cards used by the self-employed and micro-enterprises to mitigate financial strain on smaller businesses.
The European Commission has yet to respond to the inquiry, but this the second IFR query to be raised in a fortnight.
As covered by Vixio, MEPs Pasquale Tridico and Dario Tamburrano have previously urged the commission to investigate Italy’s compliance with EU payment regulations over fees charged on electronic transactions via the government-run pagoPA system.
They argued that these charges may violate the revised Payment Services Directive (PSD2), which prohibits fees on payment methods covered by the IFR.
They also sought clarification on whether Italy’s practices align with EU laws, while pushing for measures to prevent public administrations from imposing additional costs on digital payments.
