An Investigation Launched into Payment Card Organizations operating in Serbia by the Serbian Commission for Protection of Competition
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 16th 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”).