2023-07-01 04:00:00
You probably know this, but each time a customer pays by credit card, the merchant pays transaction fees. Although these costs are generally in the order of a few cents, they are increasing, which has an impact on the price that the consumer pays.
The rise of the American Visa and Mastercard networks
In France, Visa and Mastercard are gaining ground to the detriment of the Cartes Bancaires network, making French merchants fear a surge in fees for card payments. Major market players are also worried regarding a possible price increase for consumers.
According to System U, three years ago, 97% of transactions went through the CB network and only 3% through the Visa and Mastercard networks. Today, these figures have changed considerably.
The dissatisfaction of large French companies
Four French groups complain regarding the hegemonic position enjoyed by Visa and Mastercard :
SNCF, leader in rail, Système U and Auchan, giants of mass distribution, Cdiscount, leader in online commerce.
They accuse these two credit card networks of increasing their fees, thus endangering traditional businesses.
Credit card fees on the rise
Merchants must pay transaction fees to a network when a customer uses their bank card to make a purchase. These network fees are set freely by the card networks and are added to the interchange fee capped by European regulations.
Several brands such as Système U, SNCF or Cdiscount, as well as small traders, complain that these transaction fees are on the risepotentially leading to higher prices for consumers.
The impact on traditional businesses and consumers
This situation might have significant consequences for traditional businesses and French consumers:
Increased costs for merchants : Higher transaction fees lead to higher costs for merchants, especially those with low margins.
Risk of rising prices for consumers : Merchants may have to pass on this cost increase to the prices of their products and services.
Threat to employment : Some businesses may be forced to close or reduce their workforce due to these additional costs.
Possible solutions to protect merchants and consumers
To avoid a deterioration of the situation, several avenues can be considered:
Act at European level : The European authorities might intervene by capping network fees, like the interchange fee.
Encourage competition : The rise of new players, such as fintechs and neobanks, might help lower transaction costs and stimulate competition between bank card networks.
Promote alternative solutions : Merchants and consumers might turn to other means of payment, such as mobile payments or cryptocurrencies.
Faced with rising bank card fees, the authorities must find solutions to protect both merchants and French consumers. The mobilization of all the actors concerned is essential to preserve a balanced and competitive payment market.
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