The GVH watchdog levied the fines after concluding that the introduction of a uniform interchange fee structure by Visa, MasterCard and the commercial banks in 1996 inhibited competition.

According to Reuters, Tihamer Toth, chairman, GVH ruling panel, told a news conference that by charging retailers a uniform fee for card payments "competition between the two card firms and the card-accepting banks was distorted and limited".

Visa and MasterCard were fined Ft477 million each - around $2.6 million. The commercial banks - OTP Bank, Budapest Bank, MKB Bank, CIB Bank, Erste Bank, K&H Bank and ING Bank - were fined a total of Ft954 million ($5.2 million).

In a statement, Visa says: "We are extremely surprised and disappointed with today's decision from the Hungarian Competition Council on domestic interchange in Hungary.

"We are awaiting a written copy of the decision to fully understand it. However, during the relevant period Visa did not set interchange in Hungary and we do not consider there can be any credible legal basis for the finding of an infringement against Visa Europe or the imposition of a fine. We are confident that this decision will be overturned on appeal to a higher court.

"This decision does not undermine the principle of interchange. Interchange is the best mechanism for ensuring the maximum benefit to all who use card payment systems: consumers, merchants and banks. For consumers, payment cards give safe and convenient access to their funds and provide the investment needed for security, innovation and payment efficiently."

Visa and MasterCard have been under fire over interchange fees around the world in recent years. US lawmakers have been seeking to pass legislation that would give retailers a seat at the negotiating table with banks and credit card companies over interchange fee levels. In Europe both firms have been battling the EC, which has accused them of infringing European competition law.