The Turkish Competition Authority previously cleared the request of Interbank Card Center (BKM) to set a joint interchange commission rate for both credit cards and bank cards for three years or five years provided that BKM satisfies certain conditions.
At the expiry of the 5 year period provided for the preceding clearance for bank cards, BKM brought forward another request to set a joint interchange commission rate for bank cards and asked to continue including the logo costs of Visa/Mastercard in the calculation of the commission rates for an indefinite time. The TCA looked into three main factors as part of the request:
1. Evaluation of inclusion of Visa/Mastercard logo to interchange rate calculations
The TCA previously declared that the Visa/Mastercard logo on the cards was not imperative to operate the system and thus the interchange rate and the logo costs are not considered to be directly related. However, it has been added that the logo costs may be added to the calculation of interchange rates for the present time as the use of bank cards have not reached its optimum level and remained below the usage volume of credit cards. Thus, inclusion of the logo costs into interchange rate calculations was regarded as an incentive for using bank cards.
2. Analysis of time-indefinite request
The banking sector is regularly described as a dynamic sector subject to multilateral developments. Accordingly, aligned with its previous decisions, the TCA has pressed that a time period must be determined in order to aid monitoring and development of the relevant market.
3. Assessment of obligations set in previous investigations within the scope of the present application
The TCA previously required BKM's costs to be analysed by an independent auditor and obligated BKM to announce publicly the joint interchange commission rates on its website. The TCA found the previously set obligations necessary for the present request as these measures helped verify the credibility of data used in calculation interchange rates and moreover helped reduce information asymmetry amongst the stakeholders.
In the light of the abovementioned analysis, the TCA granted five-year individual exemption for BKM's request by majority voting. The conclusion ignited the "five-year or three-year" argument amongst the members of the Board. The two dissenting Board Members asserted that the individual exemption must have been granted for three years as the sector is constantly developing, and it is envisaged that the interchange rates will be regulated in future years. The recent restrictive approach of the European Commission against the interchange rates was also referenced in the dissenting votes of the Board members. Moreover, there were two other dissenting votes which argued that the technical details and the reasoning of such applications must be evaluated by the Banking Regulation and Supervision Agency (BDDK).
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