Visa is to adjust its interchange rules in New Zealand and pay NZ$2.6 million to the country's competition authority to settle a two-year old civil suit brought against the card scheme. Anti-trust claims against MasterCard and six banks remain outstanding and will be heard at the High Court in Auckland in October this year.
The New Zealand Commerce Commission issued civil proceedings in November 2006 against Visa, Mastercard and 11 banks and other financial institutions for alleged price-fixing in relation to credit card interchange fees.
In settling the claim, Visa has agreed to allow individual card issuers to set their own interchange fees up to an agreed maximum and to open the scheme to non-bank acquirers. Merchants will also be allowed to apply surcharges to credit card transactions and encourage customers to pay by other means.
"Those changes are in the long-term best interests of both New Zealand consumers and retailers," says Commerce Commission Chair Dr Mark Berry. "The Commission considers that this increased transparency will assist retailers and customers in making decisions about their payment choices."
The NZ$2.6 million payment by Visa is intended to cover the Commission's costs in raising the proceedings.
The Commission's claims against ANZ National Bank Limited, Bank of New Zealand, Westpac New Zealand Limited, ASB Bank Limited, Kiwibank and TSB Bank Limited in relation to interchange fees in the Visa scheme continues, as does its claim against those banks, MasterCard and The Warehouse Financial Services Limited in relation to the MasterCard rules.
The Commerce Act provides for penalties for price-fixing of up to the higher of $10 million per breach, or either three times the commercial gain resulting from the breach or 10% of a company's turnover.