AirPlus International will replace its
corporate card for U.K. individual-pay customers with a card subject to
fees. Chairman Patrick Diemer told BTN about the change, which will
occur this year, after the U.K. Payment Systems Regulator issued guidance last
month confirming that individual-pay corporate cards cannot be considered
commercial cards.
The distinction is crucial because a regulation
introduced by the European Union in December says the 0.3 percent cap on
interchange fees does not apply to commercial cards. The regulation also stated
that cards are commercial only if the corporate entity is billed directly. This
leaves wiggle room for national regulators to determine whether individual-pay
cards are commercial cards.
AirPlus and other payment companies have lobbied
intensely that they are, but in the United Kingdom, one of the first national
regulators to issue guidance, that lobbying has failed. The March 24 guidance
stated: "The interchange fee caps ... apply to all transactions except
commercial cards transactions where the funds that are used to settle with the
issuer come directly from the business account. ... The fact that the
individual cardholder might receive a statement or 'bill' showing the
transactions made on that specific card will not affect this."
The fees on the new cards
would help AirPlus cover interchange fees. Diemer said AirPlus will issue
Travel Expense Cards in the United Kingdom as it has done in Germany. The
German version charges a transaction fee between 1.09 and 1.19 percent for
transactions within the EU, plus an annual negotiable fee. "We guess 50
percent of our individual-pay customers in Germany will use the Travel Expense
Card," said Diemer, and the rest will switch to a corporate-pay
arrangement.
He still expects some national regulators to
take a different view from the United Kingdom's, instead defining individual-pay
cards as commercial cards. Corporate pay cards are not affected.