Europe's banks have been told that they will have to ditch interchange fees on direct debit transactions by 2012 under EU antitrust rules.
The clarification on the ruling was conveyed in a joint statement by the European Commission and European Central Bank, with the aim of encouraging the European Payments Council (EPC) to launch the Sepa direct debit (SDD) scheme on 1 November 2009.
In particular, the Commission makes clear that a general per transaction multilateral interchange fee (MIF) for direct debit transactions "does not seem justified for efficiency reasons and, therefore, does not appear compatible with EU antitrust rules".
The Commission and the ECB also note that the forthcoming approval of the revised Regulation on cross-border payments will provide a three-year transitional regime for the SDD business model.
EU authorities have already made special provision for the retention of interchange fees during this transitional period.
ECB's executive board member, Gertrude Tumpel-Gugerell, states: "The launch of Sepa direct debit is vital for the success of Sepa. We acknowledge that, after having provided clarity on the applicability of multilateral interchange fees during an interim period, this further clarifying position of the Commission now provides a clear scenario also for the long term."
The firming up of the position comes head of an EPC meeting next week, at which banking industry standard setters will determine whether the deadlines for compliance with the SDD programme are attainable.
Despite the hardening of their stance, the ECB and the Commission say they are prepared to discuss alternative revenue-generating schemes for direct debit processing post-2012.
"An MIF for error transactions could be envisaged as it may create an incentive to avoid such error transactions and, therefore, encourage the efficient functioning of the SDD scheme," says the joint statement.