ECONOMY

Card commission to go down from next week

card-commission-to-go-down-from-next-week

The average commission commercial businesses pay to banks for card transactions will soon drop to below 1 percent from the current average rate of 1.2-1.5 percent. This will come into effect after the application of the European Union directive on cuts to charges for interbank transactions as of next Wednesday.

Banks are preparing for a general overhaul of their charges, as besides card transactions, this will also concern a series of others that currently impose excessive costs on companies due to the capital controls.

The current level of commissions retailers have to pay to banks for card transactions amounts to 1-1.25 euros for credit cards and 0.40-0.70 euros for debit cards.

The application of the European Union directive will bring the commission down to 0.30 euros for credit cards and 0.20 euros for debit cards.

The reduction in the cost of using plastic money has been a longstanding demand by the commerce sector, which cites the high commissions banks impose on traders as a counterincentive against the expansion of the use of cards.

Data originating from the banks show that the commission the credit institutions charge for card transactions ranges between 0.80 percent and 2 percent, depending on the volume of each company’s transactions, with the average commission amounting to 1.20 percent. This is comparable with the charges imposed in other European Union countries, where commissions average between 1.3 and 1.5 percent. In Ireland the commission comes to 2 percent, while in Portugal it amounts to 1.1 percent.