Digital payment fees don’t impact all businesses equally. Small shops may end up paying costs three or four times higher than large companies, which have more bargaining power and much larger volumes.
This is highlighted by a new study published by the Bank of Italy, dedicated to the possible limits on commissions of the future digital euro. The research does not introduce new obligations and does not immediately reduce POS fees, but indicates which model could best protect traders, professionals and small businesses.
The solution considered most effective is a uniform ceiling calculated at European level, simple to control and difficult to influence by individual operators. For payments of small amounts, a particularly relevant possibility is also evaluated: eliminate the commission paid by the merchant.
How much do traders and shopkeepers pay?
When a customer pays with a card or digital wallet, the merchant generally incurs a Merchant Service Charge, i.e. the commission paid to the intermediary who manages the operation.
The actual cost may depend on several elements:
- value and number of transactions
- circuit used
- physical or online payment
- fixed component and percentage of the tariff
- contractual conditions negotiated by the operator.
According to an estimate by the European Central Bank referred to in the study, for international circuits European merchants sustain a weighted average commission of approximately 0.50% per transaction. The data does not, however, represent a rate valid for everyone.
Small merchants can pay up to three or four times the commissions recognized by large companies. The latter spread fixed costs over millions of operations and can compare multiple offers or threaten to change supplier. A bar, a newsstand or a small shop, on the other hand, have much more limited negotiating power.
Why micropayments cost more
The problem becomes more apparent for low-value purchases. If the contract includes a fixed component for each operation, this has a much greater impact on the payment of a coffee than a 100 euro expense.
For example, a hypothetical commission of 10 cents represents 2% of a 5 euro transaction, but just 0.1% of a 100 euro purchase. It is precisely this mechanism that makes small payments more expensive for bars, tobacconists, newsagents and local shops.
In recent years, initiatives have already been launched to obtain lower commissions on payments of less than 30 euros. The study, however, opens up a different scenario, linked to the introduction of the digital euro and the possibility of establishing a common rule across the entire euro area.
The proposal to lower commissions
The document compares two possible systems for defining the limit on commissions applied to merchants.
The first would provide a personalized cap, based on the conditions already applied to each individual merchant for comparable payment instruments. According to the authors, this method would be complex to verify and would risk maintaining existing disparities: those who pay more today could continue to be less protected.
The second system instead provides a single market cap, calculated on the weighted average of the commissions applied in the euro area. The parameter would be established centrally by the authorities and should be public, transparent and equal for all.
To verify the correctness of the rate, the merchant should, therefore, compare only two numbers: the commission applied by his intermediary and the official European limit.
A general cap would especially benefit businesses that currently have less ability to trade. Large companies could, however, obtain better conditions: the limit would represent a maximum rate, not a mandatory price.
Which fee cap might work
| Proposed model | How it would work | Advantages | Criticality |
|---|---|---|---|
| Roof for single merchant | Calculated on the conditions already applied to each merchant | It takes into account the individual contract | Difficult to verify and may preserve disparities |
| Single European roof | Based on the average of the commissions applied in the euro area | Public, uniform and easier to control | It must be calibrated to the differences between markets |
| Zero commissions on small payments | No costs below a pre-established threshold | It especially helps local shops and businesses with many micropayments | Threshold and modality are not yet defined |
Commission-free payments below a certain threshold
The proposal with the greatest practical impact concerns micropayments. The study considers a targeted exemption that would lead to zero commission on the digital euro for transactions below a certain threshold.
The threshold has not yet been defined. It is therefore not possible to say that commissions will disappear below 5, 10 or 30 euros. The hypothesis must also be accompanied by rules capable of preventing the cost from being transferred to fees, ancillary services or other contractual items.
According to the analysis, the criterion would still be simple to apply: the value of the transaction is directly verifiable and cannot be modified by the intermediary in charge of managing the payment.
What would change for consumers and businesses
For the customer, the digital euro payment should work similarly to an electronic payment, but using money issued directly by the central bank. The new tool would support cash and money deposited in accounts, without replacing them.
The direct benefit of reduced commissions would be for merchants, not the consumer. Lower acceptance costs could, however, make micropayments less expensive and reduce resistance towards the use of digital tools even for minimal amounts.
The digital euro could also offer small businesses an alternative to large international circuits, strengthening their bargaining power. In 2022 these circuits managed approximately 61% of card payments in the euro area, while thirteen countries were entirely dependent on international operators.
POS fees don’t change right away
The study is not an operational measure and the opinions expressed by the authors do not necessarily represent the official position of the Bank of Italy. The document contributes to the European discussion on the rules of the future digital euro.
Therefore, a new limit on POS commissions has not been decided and a date for the elimination of costs on small payments has not yet been set. The maximum amount of any commission must also be established by the European institutions.
The direction indicated is, however, clear: a uniform and easily verifiable tariff would better protect small traders than limits built on individual contracts. The exemption for small amounts could become the most visible change for retailers and consumers, but only after the digital euro rules are finally approved.
