A propaganda move by the EU to try to make people believe that eurocrats can regulate costs out of existence
UKIP press release
•UKIP says cap on credit card fees is an EU propaganda gesture that will drive up bank charges. Experience of similar caps in Australia, Spain and America shows credit card companies and banks just shift the fees to other consumer charges.
Steven Woolfe, UKIP MEP for the North West and spokesman on finance, called today's vote in the European Parliament "a propaganda move by the EU to try to make people believe that eurocrats can regulate costs out of existence."
The vote will allow the European Commission to impose a limit on fees paid by retailers to banks when customers make payments by credit and debit cards.
But Woolfe said: "All this cap will do is ensure the banks and credit card companies move the fees somewhere else. Someone always pays and that someone is always the individual consumer.
"The EU wants consumers to believe a command from Brussels can force businesses to provide something for nothing. It can't. Bottom line is the consumer always pays."
"When similar caps were tried in Australia and Spain customers found they had to pay 50 percent more for their credit cards. In America, when the federal government imposed a cap, 94 percent of customers experienced no significant savings, while major retailers got a windfall worth £5.3bn ($8bn) because they did not pass on savings to customers.
"In Spain, retailers walked away with a €2.7bn (£1.9bn) windfall over five years but there is no evidence of prices having fallen for consumers.
"Major retailers will be the big winners in this windfall once it is forced onto credit card companies and banks across the 28 member states. This is another example of the way the EU protects big business at the expense of small and medium enterprises." ........................................
EU Cap on Interchange Fees
The EU persists in its belief that it can eliminate consumer costs and force companies to provide something for nothing. The EU hopes people will forget that costs are always paid by individuals, not middlemen.
It’s the big retailers who benefit most, they don’t pass the savings on to consumers.
In Spain, where they already have these caps on interchange fees at a similar level to the one proposed by the EU, the retailers have walked away with a EUR2.7bn windfall over 5 years and there is no evidence of prices having fallen for consumers.
A similar policy was implemented in the United States (the Durbin Amendment to the Dodd-Frank Act) after 3 years:
• major retailers got an $8bn annual windfall, and
• 94% of consumers had not experienced any significant savings.
In Australia and Spain consumers now pay 50% more for their credit cards.
Banks have to pass their costs onto consumers; this could lead to a reduction in the number of banks able to offer free banking. It’s reported that a million Americans were forced out of the banking system as a result.