The EU caps fees on Visa and MasterCard

A certain feeling of déjà vue.

With a certain feeling of déjà vue, the European Commission is again gunning for the major card issuers.

The EC has been trying to sort out alleged anti-competitive behaviour by MasterCard and its larger rival Visa since 2007. It is all to do with interchange fees – the charges paid by retailers on card transactions. Merchants argue that card companies unfairly overcharge them; in the other corner, the card companies contend that the fees are justified by the services they offer in return, such as easy payment collection.

The EC seems to be proposing that interchange fees be capped at 0.2 per cent for debit card payments and 0.3 per cent for credit cards. According to the EC, the proposed cap will cut total debit card fees across the EU to around €2.5bn from €4.8bn; credit card fees will fall to €3.5bn from an estimated €5.7bn once the cap is in place.

As consumers, I suspect we will barely notice any difference. MasterCard and Visa Europe have already capped their fees. I would wager – not huge sums but perhaps the loose change in my pocket – that we may expect to hear about the experience in Australia when the regulators capped interchange fees.

There was a well publicized survey in Australia – sponsored by MasterCard by the way – that concluded that once the government regulated interchange fees it was impossible to determine whether merchants passed on price reductions to customers.

I expect that we may also hear of gloomy predictions that a cap on interchange fees will inevitably lead to increased reliance on annual cardholder fees. The argument will be that card issuers, faced with reduced income from one source, will look for other ways to make good that loss. Expect also to hear that loyalty and rewards programmes may become a thing of the past due to the EU’s meddling.

The market barely batted an eyelid at todays news with MasterCard shares inching down by 1 per cent today. The issuers continue to continue to win new customers and expand their range of innovative services and products. For example, MasterCard has introduced mobile apps that are able to reduce expense accounting overheads and improve expense tracking for businesses. Major contract wins include one from the government of Canada that will convert its travel expense programme to MasterCard.

It is also among the biggest financial services sponsors of sports and the arts. If you watch any of the coverage of the Open Golf championship teeing off tomorrow, you will do well to avoid seeing the MasterCard logo as a constant presence on the screen.

Visa and MasterCard are two of the strongest performing financial services firms and are extremely well placed to enjoy further earnings and profits growth. Interchange fees will never be popular with the consumer press. They are however here to stay.

Photograph: Getty Images

Douglas Blakey is the editor of Retail Banker International

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Harmful gender stereotypes in ads have real impact – so we're challenging them

The ASA must make sure future generations don't recoil at our commercials.

July’s been quite the month for gender in the news. From Jodie Whittaker’s casting in Doctor Who, to trains “so simple even women can drive them”, to how much the Beeb pays its female talent, gender issues have dominated. 

You might think it was an appropriate time for the Advertising Standards Authority (ASA) to launch our own contribution to the debate, Depictions, Perceptions and Harm: a report on gender stereotypes in advertising, the result of more than a year’s careful scrutiny of the evidence base.

Our report makes the case that, while most ads (and the businesses behind them) are getting it right when it comes to avoiding damaging gender stereotypes, the evidence suggests that some could do with reigning it in a little. Specifically, it argues that some ads can contribute to real world harms in the way they portray gender roles and characteristics.

We’re not talking here about ads that show a woman doing the cleaning or a man the DIY. It would be most odd if advertisers couldn’t depict a woman doing the family shop or a man mowing the lawn. Ads cannot be divorced from reality.

What we’re talking about is ads that go significantly further by, for example, suggesting through their content and context that it’s a mum’s sole duty to tidy up after her family, who’ve just trashed the house. Or that an activity or career is inappropriate for a girl because it’s the preserve of men. Or that boys are not “proper” boys if they’re not strong and stoical. Or that men are hopeless at simple parental or household tasks because they’re, well...men.

Advertising is only a small contributor to gender stereotyping, but a contributor it is. And there’s ever greater recognition of the harms that can result from gender stereotyping. Put simply, gender stereotypes can lead us to have a narrower sense of ourselves – how we can behave, who we can be, the opportunities we can take, the decisions we can make. And they can lead other people to have a narrower sense of us too. 

That can affect individuals, whatever their gender. It can affect the economy: we have a shortage of engineers in this country, in part, says the UK’s National Academy of Engineering, because many women don’t see it as a career for them. And it can affect our society as a whole.

Many businesses get this already. A few weeks ago, UN Women and Unilever announced the global launch of Unstereotype Alliance, with some of the world’s biggest companies, including Proctor & Gamble, Mars, Diageo, Facebook and Google signing up. Advertising agencies like JWT and UM have very recently published their own research, further shining the spotlight on gender stereotyping in advertising. 

At the ASA, we see our UK work as a complement to an increasingly global response to the issue. And we’re doing it with broad support from the UK advertising industry: the Committees of Advertising Practice (CAP) – the industry bodies which author the UK Advertising Codes that we administer – have been very closely involved in our work and will now flesh out the standards we need to help advertisers stay on the right side of the line.

Needless to say, our report has attracted a fair amount of comment. And commentators have made some interesting and important arguments. Take my “ads cannot be divorced from reality” point above. Clearly we – the UK advertising regulator - must take into account the way things are, but what should we do if, for example, an ad is reflecting a part of society as it is now, but that part is not fair and equal? 

The ad might simply be mirroring the way things are, but at a time when many people in our society, including through public policy and equality laws, are trying to mould it into something different. If we reign in the more extreme examples, are we being social engineers? Or are we simply taking a small step in redressing the imbalance in a society where the drip, drip, drip of gender stereotyping over many years has, itself, been social engineering. And social engineering which, ironically, has left us with too few engineers.

Read more: Why new rules on gender stereotyping in ads benefit men, too

The report gave news outlets a chance to run plenty of well-known ads from yesteryear. Fairy Liquid, Shake 'n' Vac and some real “even a woman can open it”-type horrors from decades ago. For some, that was an opportunity to make the point that ads really were sexist back then, but everything’s fine on the gender stereotyping front today. That argument shows a real lack of imagination. 

History has not stopped. If we’re looking back at ads of 50 years ago and marvelling at how we thought they were OK back then, despite knowing they were products of their time, won’t our children and grandchildren be doing exactly the same thing in 50 years’ time? What “norms” now will seem antiquated and unpleasant in the future? We think the evidence points to some portrayals of gender roles and characteristics being precisely such norms, excused by some today on the basis that that’s just the way it is.

Our report signals that change is coming. CAP will now work on the standards so we can pin down the rules and official guidance. We don’t want to catch advertisers out, so we and CAP will work hard to provide as much advice and training as we can, so they can get their ads right in the first place. And from next year, we at the ASA will make sure those standards are followed, taking care that our regulation is balanced and wholly respectful of the public’s desire to continue to see creative ads that are relevant, entertaining and informative. 

You won’t see a sea-change in the ads that appear, but we hope to smooth some of the rougher edges. This is a small but important step in making sure modern society is better represented in ads.

Guy Parker is CEO of the ASA