Investigation shows inter-banking card transaction fees in Romania, among highest in Europe, profitable card issuing activity


A recent investigation by the Romanian Competiton Council revealed that the inter-banking commissions applied for card transactions with Visa and MasterCard cards are among the highest in Europe.

The inter-banking fee of 1 percent for Visa cards and 1.2 percent for MasterCard are higher than the 0.5 to 1 percent applied in France, Italy, Sweden, the Netherlands, or UK.

The investigation was started in 2011 and looked at how inter-banking commissions are applied for card payments, the level of fees and commissions for transactions with cards at retailers, the profitability on the card payments market and the competition on this market segment.

In case of POS transactions, the inter-banking fee is paid by the accepting bank – the one which owns the POS installed at retailer- to the bank which issued the card; the fee is basically covered by the retailer and indirectly, by consumers.

Until 2011, inter-banking commissions were established by the member banks of Visa and MasterCard, and were of 1 percent. From 2012, the inter-banking commission for transactions in Romania was established by MasterCard and applied to its member banks, and this lifted the level to 1.2 percent – similarly to Greece. Poland is the only country where the fee is higher, at 1.4 percent. Countries like Belgium, France, Italy, Sweden, UK and Hungary have fees between 0.5 and 1 percent.

In Visa’s case, the inter-banking commission is still established by the member banks in Romania and stayed at the same level of 1 percent.

The Competition Council analysis found the average level of the commission paid by retailers to accepting banks stays at 1.78 to 2.4 percent of the value of the transaction, which, according to the Council, impact considerably the final prices of products and services.

The Council also found that the average profit from the card issuance activity was between 62 and 101 percent for half of the interviewed banks between 2009 and 2011.

Revenues from inter-banking commissions stay between 8 and 11 percent of the total revenues from the card issuing activity, and, according to the analysis, issuing cards still remains a profitable activity even without the inter-banking commissions.

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