Italian Antitrust body backs deal to soften fees on digital payments

By Giuseppe Fonte

ROME (Reuters) - Italian Antitrust body has given a green light to a deal negotiated by retailers, banks and payment firms to soften fees on small card transactions as demanded by the government, according to sources and documents seen by Reuters.

The clearance is expected to pave the way for a formal accord, which would allow Prime Minister Giorgia Meloni to remove the threat of a windfall tax on payment providers such as Nexi (BIT:NEXII), Mastercard (NYSE:MA) and Visa (NYSE:V).

People familiar with the matter said the parties had finalised the terms of a Memorandum of Understanding (MOU) last month, but financial firms were worried about the risk of future fines for competition law infringements. As a result, the Treasury sought an opinion from the Antitrust authority.

Replying to the ministry this week, the body said it did not find "any particular criticalities" in the proposed MOU, which left full autonomy to each market operator in deciding transaction fees.

Italy said at the end of 2022 it would broker a deal to cut fees charged by financial firms on electronic transactions worth up to 30 euros ($33.6) for smaller businesses with annual revenues of up to 400,000 euros.

To encourage negotiations, Rome put a provision in this year's budget for a tax of up to 50% on net proceeds from those transactions in the absence of an agreement.

The MOU, seen by Reuters, encourages financial companies to launch competitive commercial initiatives on payments not exceeding 30 euros but stops short of demanding firm promises.

"Commercial offers should be significantly competitive at least for transactions worth up to 10 euros, should be advertised for at least six months and have a duration of not less than nine months," the MOU, whose effectiveness is limited to 12 months, said.

The Treasury could summon the parties on July 27 to try to formalise the deal, a source said.

With most commercial transactions by payment providers already free of charge for purchases of up to 10 euros, the accord would not significantly alter the status quo, but it takes pressure off the government.

Meloni's allies thrust the issue of card payments into the spotlight last year, when they sought to address complaints by small retailers about fines introduced by the former administration of Mario Draghi for shops refusing card payments.

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