LUXEMBOURG – Visa Europe Ltd. will “significantly” lower its processing fees for credit cards in an effort to stem an investigation by the European Union’s antitrust group, Bloomberg reports. The reduction in cross-border fees will bring Visa Europe more in line with MasterCard Inc.

Visa Europe also said it would change the rules to allow financial institutions to use a lower, inter-bank charge when competing for cross-border customers. “It will put at the same level the fees that are used by MasterCard and by Visa and this will allow cheaper use of cards that are a payment system used in almost half of our total payments in the EU,” said Joaquin Almunia, antitrust commissioner for the EU.

The firm will drop those fees by 40% to 60% to 0.3% of the transaction value for domestic and cross-border payments. The fee reduction will stay in place for four years. Antitrust investigators will test market the lower fees with industry organizations before the new charges would become mandatory.

“Merchants will now be able to benefit from centralizing their acquiring in one place, which will bring benefits to the European economy as a whole,” said Ruth Milligan, senior adviser on payments at EuroCommerce. “We have long argued that the card scheme’s rule on cross-border acquiring were wholly contrary to single market principles and are delighted to see them go.”

Four years ago, MasterCard settled with the EU with a similar fee reduction, although the company has appealed that decision.