Direct Charging At ATMs

A situation has arisen in Europe that has the potential to restrict the Public's convenient access to cash at ATMs.
80% of all cash is dispensed by ATMs.
Where ATMs are Free To Use, the ATM operator receives a payment from the Card Issuer each time a customer uses a card to withdraw cash. Such payments are commonly referred to as "interchange".
The problem is that the major Card Schemes have been reducing the level of interchange in recent years. These reductions are now calling into question the viability of operating ATMs in a number of European Countries.
There is an alternative way for ATM operators to fund their activities. Under the European Payments Directive, ATM operators have the right to charge ATM users, with such charges replacing the interchange payment. This is known as "Direct Charging".
The European Payments Directive envisages the permissibility of Direct Charging, unless an individual member state passes a law prohibiting such charges.
There is, however, a fly in the ointment.
Whilst MasterCard has readily accepted the European Payments Directive stance on Direct Charging,other Card Schemes have not.
Despite the permissibility of Direct Charging under the European Payments Directive, some Card Schemes seem to be refusing to accept such charging, unless the individual EC member state has passed legislation that permits Direct Charging.
This is clearly totally unacceptable.
The Public must have access to cash at ATMs. If Card Schemes claim they cannot afford to pay interchange at a level ATM operators judge to be viable, it is crucial those Schemes accept the alternative of Direct Charging, as defined in the European Payments Directive. Specifically, member states do not have to opt in to allow charging. They are assumed to have opted in unless they pass legislation to the contrary.
An objective observer could easily conclude that certain Card Schemes are trying to artificially restrict the Public's access to cash at ATMs. Restricting access to cash is likely to increase card usage, something clearly very much in the interests of a Card Scheme.
It would be good if Card Schemes all acted in the Public Interest without the European Commission having to implement sanctions against them.
However, time is running out for them to do so. Months rather than years has to be the timeline.












 

Tuesday, 19th February 2013

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