MasterCard called on members of European Parliament on Tuesday to exclude commercial cards from draft legislation regarding interchange, or swipe, fees ahead of a vote on the measure.
Commercial cards, which were not considered in the original interchange fee proposal, are generally used to replace manual invoices and checks between businesses and merchants. A last-minute amendment was introduced to expand regulation of interchange fees, reversing an earlier decision to exclude the cards.
MasterCard said commercial cards not only provide quick payments for merchants but also help businesses streamline their operations.
“Treating commercial cards in the same way as consumer cards is like treating a family car in the same way as a commercial truck. Commercial cards were not included in the original proposals for good reasons,” Andrew Buckley, the head of MasterCard commercial products in Europe, said. “They differ significantly from consumer cards in purpose and usage, and bring huge benefits to small businesses. Copy-pasting proposals designed for consumer cards would drive the cost of commercial cards up substantially and make them too expensive for many small businesses.”
MasterCard said capping interchange fees at 0.3 percent for commercial cards would force issuing banks to raise cardholder fees significantly. The company pointed to a recent survey that indicated approximately 50 percent of small businesses in France, Germany, Italy and the U.K. would be unwilling to pay an extra $14 per month for their commercial card.
“One of the biggest benefits of commercial cards is the immediacy and guarantee of payment,” Buckley said. “If they become too expensive, it will be more difficult for small businesses to make payments and get paid. Nobody wants to see this at a time when European business loses over [$480 billion] annually in late and unpaid bills. That is why we hope the European Parliament will go back to the Commission’s original proposal in its plenary vote and exclude commercial cards from the legislative scope, in the interests of small business and the economy in general.”
The European Union’s governing body is scheduled to vote on the measure on Wednesday.