Visa Europe caps transaction fees after EU antitrust probe
Credit card company Visa Europe will cap the transactions fees it charges to 0.3 per cent, the European Commission said on Wednesday. The cut in fees represents a 40-60 per cent reduction in Visa Europe's multilateral interchange fees (MIFs).
The cap will initially apply to to cross-border transactions within the European Economic Area (EEA) but after a two year delay the cap will also apply to domestic transactions in each EEA country.
In 2012, the Commission notified Visa that fees set by the company for consumer credit cards may violate EU antitrust regulations.
The Commission has been pushing for lower fees saying that the cost to European business could be as high as €10bn (£8bn).
EU competition commissioner Joaquin Almunia commented:
The cap on inter-bank fees for Visa Europe's credit cards and the commitments ensuring cross-border competition are excellent news for European consumers, since the fees paid by retailers end up on their bills.
The Commission highlighted the potential benefits of the cap citing data from the UK. In 2012, data and credit card transaction value in the UK amounted to £156bn. If one third of that credit card turnover benefited from reduced MIFs Uk retailers would have saved £312m.
Visa Europe has also committed itself to introduction of rules making the prices paid by merchants more transparent as well as introducing a simplified MIF structure.