Visa Europe Should Match MasterCard Fee Cut, Almunia Says
Visa Europe Ltd. should match MasterCard Inc.’s lower fees for credit cards to settle a European Union antitrust investigation, the EU’s antitrust chief said.
EU Competition Commissioner Joaquin Almunia said he hoped that Visa Europe, operator of the largest payment-card network in the 27-nation EU, would reduce the fees it charges for cross- border credit-card transactions to “the level we have agreed in the past with MasterCard” to end a five-year probe.
“I think the best way to advance is, as a first step, to agree on this 0.3 percent to be on equal terms with its main competitor MasterCard,” Almunia told Bloomberg News in an interview on July 16. “In this area it’s better to reach agreements.”
Almunia said in May that total costs retailers face to handle payments haven’t decreased since 2006. Regulators settled earlier probes into Visa Europe and MasterCard concerning the fees they charge on debit card transactions outside a user’s home country. Visa Inc. (V), MasterCard and some of the biggest U.S. banks this month agreed to a U.S. settlement of at least $6.05 billion in a price-fixing case brought by retailers over credit- card swipe fees.
Visa Europe “is committed to continuing dialog to reach a commercially acceptable agreement setting credit and deferred- debit interchange” fees, said Amanda Kamin, a spokeswoman for the company in London.
Visa Europe reduced similar fees for debit cards last year to settle a 2009 EU complaint. The company split from Visa Inc. before the U.S. card company’s initial public offering in early 2008.
Almunia will meet with Visa Europe’s Chief Executive Officer Peter Ayliffe next week, he said. The EU is continuing its investigation into the card fees and is still waiting for proposals from the company on any possible settlement. He didn’t rule out sending an antitrust complaint to Visa Europe.
“It’s a possibility during the next steps of investigation additional objections can appear,” Almunia said.
The EU commissioner said a May court decision backing regulators’ curb on MasterCard (MA)’s cross-border card fees should encourage Visa “to follow the route of an agreement and not to continue the confrontational” approach.
The EU’s General Court rejected MasterCard’s challenge to the EU decision that it unfairly inflated the transaction fees paid by retailers for processing payments. MasterCard will appeal the case to the EU’s highest court.
Retailers have long complained about the cost they are charged to accept card payments. Unlike for checks, banks charge interchange fees to process debit- and credit-card payments. Card operators set the amounts, own the payment networks and pass the money to the lenders. The retailer’s bank pays the fees to the customer’s card issuer.
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