EU Accepts Visa and Mastercard Offer to End Antitrust Probe
The agreement could cut interchange fees by 40% on average.
May 01, 2019
BRUSSELS, Belgium – The European Union has accepted an offer from Visa and Mastercard to cut fees on payments made by tourists using cards issued outside the bloc, according to U.S. News. This agreement could cut such fees by 40% on average, a benefit for both merchants and consumers.
For decades, the European Commission has been trying to crackdown on so-called interchange fees in which the merchant’s bank pays a charge to the cardholder’s bank, eventually resulting in higher prices for consumers. The lucrative fees, a source of revenue for banks, are ultimately borne by the merchant.
But pressure escalated in January when the EU’s executive arm fined Mastercard $636 million for denying merchants access to payment services outside their home countries by using the fees.
“This, together with our January 2019 decision on Mastercard’s cross-border card payment services, will lead to lower prices for European retailers to do business, ultimately to the benefit of all consumers,” said Margrethe Vestager, Europe’s antitrust chief.
Visa, the world’s largest payments network operator, and closest rival Mastercard have proposed a 0.2% fee on non-EU debit card payments made in shops and a 0.3% fee on credit card payments, the Commission said last year. This would bring their fees in line with those charged for EU cards.
Global Payment
