Fitch Ratings said on Wednesday that the European Commission’s proposal to cap interchange fees for some European debit and credit transactions will likely have the largest impact on card-issuing banks across the continent.
The proposal targets Visa, MasterCard, American Express and Discover and would cap interchange fees at 0.2 percent for debit transactions and 0.3 percent for credit transactions. Current fees vary across EU member countries and can be as high as 1.8 percent.
Fitch said that while American Express and Discover will be affected by the proposal, the effect will be muted.
Interchange fee regulation, according to the proposal, would result in $11.9 billion in annual savings for merchants, of which $7.9 billion could be passed on to European consumers.
Fitch also said that, if the regulation is approved, it could possibly lead to higher cardholder fees—a trend seen after the implementation of interchange regulation in the U.S.