American Express Company (NYSE: AXP) issued the following statement today based on preliminary reports characterizing the contents of the European Commission’s draft proposals on payment industry regulation that is scheduled to be released next week.
- The publication of formal proposals by the Commission will mark the start of a lengthy legislative process and review period. We expect these proposals to prompt extensive debate among many market participants.
- The proposals focus primarily on and cap the interchange fees charged by four-party payment systems, such as Visa and MasterCard.
- The discount rate that American Express charges merchants would not be regulated.
- Our proprietary consumer and corporate card businesses are not covered by the proposed pricing caps.
- Three-party systems, such as American Express, would only be covered when they license other institutions to issue cards, as in our Global Network Services Business. GNS represents a relatively small percentage of our European business.
- The provisions that focus on separating the payment network and processing functions do not appear to impact proprietary networks like ours.