Mastercard and Visa have agreed to cut interchange fees for payments made in Europe by cards issued elsewhere by an average of 40% following an EU anti-trust investigation.
The two payment card schemes were berated by the EU's competition watchdog for applying higher inter-regional interchange fees for European retailers accepting payments from cards issued outside the EEA, which it claimed increased prices for consumer goods and services across the region.
The Commission is the first competition authority in the world to intervene on inter-regional charging structures.
Commissioner Margrethe Vestager, in charge of competition policy, says: “Mastercard and Visa have committed to significantly reduce the interchange fees applied to payments made in Europe with cards issued elsewhere.The commitments, which are now binding on Visa and Mastercard, will reduce the costs borne by retailers for accepting payments with cards issued outside the EEA. 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”
The Commission has been waging a long-term war with the two dominant card schemes over the costs borne by merchants for accepting Visa and Mastercard cards, culminating in the imposition of caps on cross-border charges and a €570 million fine levied on Mastercard for limiting the possibility for merchants to benefit from better conditions offered by banks established elsewhere in the Single Market, in breach of EU antitrust rules.