You are here
Visa, MasterCard finalise EU card probe with fee cut pledge
[BRUSSELS] Visa Inc and MasterCard Inc ended nearly two decades of European Union antitrust scrutiny with a pact that requires them to reduce fees for foreigners shopping in the region.
The EU dropped its final investigations months after fining MasterCard 570.6 million euros (S$866.8 million) in another probe over payment rules. Monday's settlement, which rubber-stamps a draft accord from December, sees the duo reduce levies for non-European card-holders charged on purchases in the 28-nation bloc.
"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," Margrethe Vestager, the EU's competition commissioner, said in a statement.
Under the pact, debit card fees will fall to 0.2 per cent of a transaction and credit card fees will be cut to 0.3 per cent, the same for European cards. MasterCard said it will apply the new rates from Oct 19.
The fee reductions must be introduced within six months and will last for 5 1/2 years. The companies can be fined if they breach the pledge. For online transactions, where there's a higher risk of fraud, the fees will be 1.15 per cent for debit cards and 1.5 per cent for credit cards.
The move to limit such interchange rates would most affect foreign banks such as JPMorgan Chase & Co and Citigroup Inc, which have large credit-card portfolios in the US with cardholders who shop around the world.
"MasterCard sees the closure of this antitrust chapter as an important milestone," the company said in an emailed statement. Visa said in a separate statement it "played a central role negotiating a resolution that achieves the best outcome" for both firms.