The European Commission invites all stakeholders to submit their views on the commitments of Mastercard and Visa
The European Commission is inviting interested parties to discuss commitments offered separately by Visa and Mastercard to address competition concerns relating to inter-regional interchange fees for payment card transactions.
When a consumer uses a banking card in a shop or online, the bank of the retailer pays a fee called a “multilateral interchange fee” (MIF) to the cardholder’s bank. The acquiring bank passes this fee on to the retailer who includes it, like any other cost, in the final prices to all consumers, even to those who do not use cards.
Inter-regional interchange fees are MIFs applied to payments made in the European Economic Area (EEA) with consumer debit and credit cards issued outside the EEA. This would be the case, for example, when a US tourist uses a Mastercard or Visa card to pay a restaurant bill in Belgium.
The Mastercard and Visa networks set the level of MIFs applied by their licensee banks between them. In the absence of bilateral agreements between the banks, the level of the MIFs set by Mastercard or Visa networks applies by default.
The Commission is concerned that inter-regional MIFs may anti-competitively increase prices for European retailers accepting payments from cards issued outside the EEA and in turn lead to higher prices for consumer goods and services in the EEA.
To address the Commission’s competition concerns, Mastercard and Visa have separately decided to offer the commitments that would reduce the inter-regional MIFs by at least 40%.
The commitments would apply for a period of five years and six months. A trustee would be in charge of monitoring the implementation of the commitments of the two companies.
The Commission invites all stakeholders to submit their views on the commitments within one month of their publication in the EU’s Official Journal. Taking into account all comments received, the Commission will then take a final view on whether the commitments address its competition concerns.