American Express Company 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.
Given the potential impact on consumers and competition within the European
payments sector, American Express has been in touch with senior policy makers
at the Commission and will continue to represent its positions vigorously
throughout the process.
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