The interchange fees levied on credit and debit card transactions may have been reduced at the insistence of the European Commission but the chief executive officer of Visa Europe, Nicolas Huss, is not convinced that the savings will be passed on to the customer.

He is even more concerned that the lower fees may have a negative impact on the investment being made by card issuers – especially in those countries which are most lacking in card payment infrastructure.

“It is ironic that so much was said about interchange fees when in so many countries they were already very low, especially in countries which already had a robust infrastructure.

“That infrastructure comes at a cost – perhaps often underestimated – whether you are talking about the point-of-sale (POS) systems required by retailers, the banks’ security systems, and even card payment systems at petrol stations,” he said.

“Historically, the bank issuers’ investment has benefitted both retailers and customers; now that €6 billion is moving to large retailers. This will clearly have an impact on the business model of the issuers but our real concern is that there is no commitment from the merchants to invest any of that money in security or innovation for the customers,” he said, pointing out that Visa Europe recently spent over €1 billion on a new system, with more than €200 million invested every year in new technology and innovation.

“I don’t want to give the impression that we are resisting regulation as we believe it is a good thing. It establishes a level playing field – which is always welcomed by those who are happy to have competition. But cards have become such a commodity that everyone expects them to be free!” he admitted.

Mr Huss said that if there were insufficient investment, take-up by merchants – known as the acceptance rate – might stagnate.

“My point to regulators or governments is always the same: you need to be very careful as it is in everyone’s interest to encourage card use as the alternatives – cash or cheques – are much more expensive and much less secure.”

The payment part of your purchase is simply disappearing. That is the new evolution

The situation in Malta is dynamic, with 811,000 credit and debit cards used in Malta and numbers growing steadily – but that is still just 1.9 cards per person, above the EU average but still lower than in many other countries.

“Cash usage is well above the average that we see in the EU. Cheque usage has disappeared in most countries, and very few countries in Europe still use them – Malta and France being the exceptions.

“And even the way that people use their cards here poses a great opportunity for us as many customers withdraw money at the ATM and then spend it, rather than paying directly with their card!” he smiled.

One way to increase usage would be to increase the number of accepting merchants – there are only 9,000 outlets that have POS, for example, and cards are not yet accepted at petrol stations.

One solution is awareness across all the levels of stakeholders – centred around the fact that cash and cheques are more expensive to use than current interchange levels.

“The cost for management, administration and security is not visible and straightforward but it has been proved by studies,” he said.

“And cards are also an excellent way to fight the shadow economy!”

In spite of the odd horror story that makes the front page, card fraud is very low. The European Central Bank recently reported that fraud through ATMs and POS was going down but that cases relating to ‘card not present’ payments (CNP) – such as over internet – are going up. The ECB said improvements would come from more uptake of Europay, Mastercard and Visa (EMV) standards – which have effectively prevented almost all the fraud through POS.

“Last week’s fraud figures showed historical lows for three to four years – slightly up in Europe but down for Visa overall. CNP is a new challenge and a lot of what we are doing now is focussed on making sure that we keep up with increased security as e-commerce and m-commerce take off,” he said, referring to products like Visa’s ‘V.me’ – digital wallet ­– and Verified by Visa, which offers an extra level of security through the use of a unique password, and which is now used in 56 per cent of online intra-European e-commerce transactions.

New forms of payment like Apple Pay and contactless cards are actually boosting card usage and offering increases security and efficiency.

“The fact that most of the digital giants – not only Apple but also Samsung and Google – are using our card system to build new commercial propositions and ways of payments is the proof that our system is very efficient, and very cost-effective.

“By 2020, all of our terminals will be contactless. We have seen more than one billion transactions over the past 12 months, and 25 per cent of our cards are contactless.

“Transport for London was hoping to reach 20 per cent of ‘day travel’ paid by contactless cards by the end of 2016 but got there within a few months of launch. People have simply replaced their Oyster card with their Visa contactless card or by using the mobile app.

“Imagine the ways this could be used. Say I buy coffee from the same place every day on my way to work. As I approach, a window would pop up on my mobile asking if I want my order to be prepared. I say yes, and my cappuccino is ready and I don’t have to pay because the payment is done by the app!

“I already do this with my taxi through an app. The payment part of your purchase is simply disappearing. That is the new evolution.”