Polish interchange fees are some of the highest in Europe Shutterstock

Visa has joined MasterCard in announcing plans to unilaterally lower interchange fees for transactions with payment cards in Poland. Interchange fees are small charges paid by a merchant’s bank to the cardholder’s bank. Visa says it is seeking to put its rates in line with what was provisionally agreed at a round-table discussion headed by the National Bank of Poland.

Earlier this year the NBP brought stakeholders together in an attempt to broker a voluntary, cross-industry agreement on interchange-fee limits, but talks fell through. The central bank had devised a program aimed at lowering fees gradually, so as not to harm the growth of the domestic non-cash payments market.

Rates in Poland are among the highest in Europe, and the NBP wanted to reduce them incrementally from the current average of 1.6 percent to the European average of 0.7 percent for debit cards and 0.84 percent for credit cards in 2017.

The NBP blamed MasterCard for the breakdown in talks, since the company did not agree with the tabled proposal.

“In a situation where the National Bank of Poland-sponsored program to reduce card fees in Poland cannot be turned into practice, we would like to pursue as many of its goals as possible,” said Gosia O’Shaughnessy, Visa Europe senior vice president.

With regard to Visa debit cards, the interchange fee will stand at 0.9 percent for micropayments (up to zł.20) and 1.25 percent for transactions above zł.20. For Visa credit cards, the respective rates will be 1 percent and 1.3 percent. The rates will come into effect in January.

MasterCard announced in May that it would be unilaterally cutting interchange rates on some of its products.

Legislative route

“The cuts by MasterCard and Visa are very positive for us, but the level of the cuts is not as deep as envisaged in our program,” said Robert Klepacz, deputy director of the Payment System Department at the NBP.

The NBP has now forwarded its proposal for capping interchange fees to the Finance Ministry, which is currently also considering a number of legislative proposals from members of the Sejm (the lower house of parliament) and industry groups.

Małgorzata Brzoza, spokesperson for Finance Minister Jacek Rostowski, said that the Ministry of Finance would likely present a draft of the government position to the Council of Ministers for adoption.

The government’s draft position, she said, would be based on the proposals from the Sejm parliamentary caucuses. She added that the NBP’s proposal is being considered as part of the common discussion on interchange fees.

“We are aware that some of the draft proposals contain much sharper and quicker reductions than we proposed,” said Mr Klepacz of the NBP.

“If you reduce too fast and deep, the costs could be passed on to the cardholder – reductions should be step-by-step,” he added.

Gareth Price