Eye on Regulation: Updated List Shows Heavy Activity in the U.S., EU and Malaysia

A new update of a list detailing where public authorities have intervened in payment card merchant pricing and rules shows only one country, Malaysia, was added over the past year, but authorities took new regulatory measures in places on the predecessor list, particularly the European Union and the United States.

The new list from the Federal Reserve Bank of Kansas City tracks regulations in addition to court actions taken by public authorities since the 1990s to enforce antitrust laws or other directives. It shows 34 countries plus the European Union have had some sort of public authority involvement in payment card interchange and service fees, one more than on the list the Kansas City Fed published a year ago.

The 2015 list also says public authorities in 36 countries plus the European Union have investigated or taken action on payment card surcharges or discounts over the past quarter-century, the same as last year.

The newcomer to interchange regulation is Malaysia, where a range of new central-bank price controls on credit and debit cards took effect July 1. Credit card interchange is now capped at 1.1% or 1% of the sale, and in 2021 the cap goes down to 0.48%.

Some of the most significant recent action on credit and debit card pricing and merchant rules elsewhere took place in the European Union and the United States, where the list notes that a federal court in February found that American Express Co.’s anti-steering rules for merchants violate antitrust laws.

The European Union, meanwhile, was very active with pricing regulations. In March, the European Parliament approved interchange caps of 0.3% for credit and 0.2% for debit beginning Dec. 9. And last month, the European Commission, the EU’s antitrust authority, filed a statement of objections to MasterCard Inc.’s cross-border acquiring and inter-regional interchange fees, claiming they violate EU antitrust laws.

The list was compiled by Kansas City Fed senior economist Fumiko Hayashi and Jesse Leigh Maniff, a payments research analyst.