CJEU: Three party card scheme may be tantamount to four party scheme for interchange fee purposes
in other payment systems, discriminatory rules, and restrictions on the basis of institutional status. In that case, the High court asks whether, in the event that a three party payment system such as American Express enters into co-branding arrangements or makes use of an agent, that system is subject to the access obligation laid down by the directive, where the co-branding partner does not itself provide payment services within that system or where the agent acts on behalf of the system in providing
In its judgments, the court answers first, in case C-304/16, that it is not apparent from either the wording or the structure of the regulation that a co-branding partner or agent must itself be involved in the issuing activity for the three party payment card scheme to be considered to be a four party payment card scheme. The court states that, if the EU legislature had wanted to restrict the scope of the regulation so that that would be the case, it could have expressly done so.
Further, the court notes that the aim of regulating interchange fees is to improve the functioning of the internal market and to contribute to reducing transaction costs for consumers. The court holds that it is not inconceivable that some type of consideration or benefit might be identified as constituting an implicit interchange fee, even though the co-branding partner or agent with whom the three party payment card scheme concludes an arrangement is not necessarily involved in the issuing activity of that scheme. Consequently, the court considers that it might prove difficult to achieve the objectives of the regulation, in particular that of ensuring a level playing field in the market, if situations where a co-branding partner or agent does not act as an issuer were, for that reason, to be exempted from the rules laid down by that regulation with respect to interchange fees.
The court therefore holds that, where a three party payment card scheme enters into a co-branding arrangement or an arrangement with an agent, that scheme must be considered to be a four party payment card scheme, and consequently the interchange fee caps laid down by the regulation are applicable to it.
In case C-643/16, the court considers that a three party payment card scheme that has entered into a co-branding arrangement is not subject to the access obligation laid down by the directive in a situation where that co-branding partner is not a payment services provider and does not provide payment services within that scheme with respect to the co-branded products. However, a three party payment card scheme that makes use of an agent for the purposes of supplying payment services is subject to the access obligation laid down by the directive.