On 14 September 2018, the Serbian Commission for Protection of Competition (hereinafter the “Commission”) launched an investigation into international payment card organization operations on the Serbian payment cards market. The investigation came after the Commission had been notified by the Serbian Society of Bank Clients “Efektiva” that a payment card organization had set high minimum interchange fees for its member banks. Shortly thereafter, the Commission launched the same type of investigation into the operations of a second international payment card organization related to the same matter.

The subject matter of these inquiries are interchange fees charged when using credit or debit payment cards. Any payment card transaction between a customer and a merchant is followed by a transaction between their respective banks whereby the bank, which issues the payment card (the bank of the customer – issuing bank), charges an interchange fee to the bank of the merchant (acquiring bank). Allegedly, the investigated payment card organizations had set high, unwarranted default interchange fees, binding to all their member banks in the territory of Serbia. As noted by the Commission, these fees are several times higher than allowed by the Law on the Interchange Fees and Specific Rules on Payment Transactions Based on Payment Cards (“Official Gazette of RS” No. 44/2018), coming into force on 16^th December 2018, or by EU Regulation on interchange fees for card-based payment transactions no. 2015/751.

The Commission’s position is that acquiring bank includes the interchange fees into the fee charged to the merchant, which has a direct impact on retail prices, since the merchants shifts the burden of the fee to its consumers, by increasing retail prices. In order to comply with the imposed fix interchange rates, all banks have set a similar merchant fee (composed mostly, up to 60-70%, of the interchange fee) which in turn hinders competition among the banks for services of acquiring payment cards, and possibly hinders competition among the issuing banks in the territory of Serbia.

The Commission has found that above dealings of payment card organizations are prohibited as they fall under the scope of restrictive agreements under Article 10 of the Law on the Protection of Competition (“Official Gazette of RS” No. 51/2009 and 95/2013”).