Interchange fees on direct debit in Europe to be eliminated by 2012

The EU antitrust has ruled that Europe's banks should abandon interchange fees on direct debit transactions by 2012. The European Commission and European Central Bank has provided a joint statement as clarification on the ruling, with the aim of encouraging the European Payments Council (EPC) to launch the Sepa direct debit (SDD) scheme on 1 November 2009.

The Commission stated that the multilateral interchange fee (MIF) for direct debit transactions is not justified, neither it is compatible with EU antitrust rules. Moreover, it is known that approval of the reviewed Regulation on cross-border payments will provide a three-year transitional regime for the SDD business model.

The special provision for the maintenance of interchange fees during this transitional period has already been made by EU authorities.

Moreover, the ECB and the Commission stated they were prepared to discuss alternative revenue-generating schemes for direct debit processing after 2012, regardless their hardening position.