Visa Europe Offers to Settle European Union Antitrust Charges on Card Fees
Visa Europe Ltd., operator of the largest payment-card network in the 27-nation European Union, offered to reduce debit card transaction fees paid by retailers in a bid to resolve an EU antitrust case.
The European Commission said it may close its investigation into debit-card charges after Visa Europe promised “to significantly cut” fees to 0.2 percent. A separate probe into fees for credit-card and deferred-debit transactions, where customers must settle their bills at the end of the month, will continue, the Brussels-based agency said.
“This does not mean that the Visa case is over,” Amelia Torres, a commission spokeswoman told journalists at a regular briefing in Brussels today. “We still have an investigation concerning credit cards and that continues.”
Out of 390 million Visa-branded cards in Europe, about 256 million are debit cards, the London-based company said. The so-called interchange fee, based on Visa’s guidelines, is paid by the retailer’s bank to the bank that issued the customer’s card. MasterCard Inc. settled a similar case with the commission last year, agreeing to reduce the interchange fee to 0.3 percent a transaction for credit cards and 0.2 percent a transaction for debit cards.
“In proposing these commitments Visa Europe has acted in the best interests of consumers, retailers and our member banks,” said Peter Ayliffe, president of Visa Europe, in a statement today.
The commission will seek comments on the debit-card proposals before formally adopting the commitments.
EuroCommerce, a group representing retailers such as Carrefour SA and Tesco Plc, said the commission had accepted a “weak interim compromise” only on debit card fees.
“We are very disappointed that the commission has opted for this marginal way out on Visa”, Xavier Durieu, EuroCommerce’s secretary general, said in a statement. “Since EuroCommerce lodged the first complaints 13 years ago, neither Visa nor MasterCard have brought convincing justification for interchange fees on card transactions.”
The group last year complained to the commission over the fees.
The offer concerns Visa Europe’s fees in 9 European countries, including Iceland, Ireland and Italy. New fees in Luxembourg and the Netherlands concern prepaid cards issued by Visa, the commission said.
In 2002, Visa Europe resolved an initial EU complaint by agreeing to cut the interchange fee over time and cap it based on costs. The commission concluded then that the five-year agreement would help payment cards work to the benefit of consumers. The commission in 2008 opened its new probe into Visa Europe’s fees a few months after the settlement expired.
Visa Europe split from Visa Inc. before the U.S. card company’s initial public offering in early 2008.
To contact the reporter on this story: Stephanie Bodoni in Brussels at firstname.lastname@example.org