MNB proposes lower interchange fees to promote bank card use

Conferences

The National Bank of Hungary wants to reduce interchange fees as part of package of proposals to promote the use of bank cards and support the expansion of the bank card market, MNB consultant Lorant Varga said at a forum organised by business daily Napi Gazdaság on Tuesday. Interchange fees of domestic banks must be reduced by two-thirds, bringing them to a level that does not exceed cross-border interchange fees. The other proposals contained in the package are ones to subsidise the expansion of POS terminals, make acceptance of bank cards mandatory for some sectors and require the use of bank cards for purchases over a certain amount, Varga said. The state subsidies for the POS terminals could reach HUF 2-4 billion, but some of the support could come from European Union funding, he added. The MNB is consulting with the National Economy Ministry and the National Development Ministry on the proposals, Varga said. MasterCard Europe director Andras Hemberger, who also participated at the forum, said interchange fees had been halved since 2008, adding that a further reduction would not be timely. The fees should be determined by the market, he said. Ede Kiss, Visa Europe's director in charge of Hungary, said differences in interchange fees had sharply reduced Visa's market share in Hungary recently and voiced support for the proposed reductions. György Vámos, chief secretary of the National Retailers Association, said shops were not interested in raising payments with bank cards as these cost them 8-10 times more than transactions with cash. The European Commission is expected to publish draft legislation in June on directives for domestic and cross-border interchange fees, said Ágnes Sütő of the Hungarian Banking Association.

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