EC and card giants close in on inter-regional interchange fee agreement

EC and card giants close in on inter-regional interchange fee agreement

Visa and Mastercard are nearing a deal with the European Commission which would see the interchange fees merchants in the EU pay on transactions involving cards issued outside of the region slashed by at least 40%.

In response to the EC's competition concerns, the American card firms have offered to cut their inter-regional multilateral interchange fees, bringing down the cost to, for example, a French merchant accepting a card payment from a US tourist.

Under the plan, card present transaction fees will be capped at 0.2% of the value of the transaction for debit and 0.3% for credit. For online payments, the cap will be 1.15% for debit cards and 1.5% for credit cards.

The offer, which would be binding for five and a half years, would also see Visa and Mastercard promise not to circumvent the caps and to make sure that the fees are made clearly visible on their websites.

The EC is now opening up a one month consultation period for stakeholders to give their opinion before deciding whether the card firms have done enough to allay competition concerns.

If the deal is waved through, the EC can fine Visa and Mastercard up to 10% of their worldwide turnover for breaking it.
Editorial | what does this mean?
This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Comments: (3)

Duane Tough
Duane Tough - PBATM - ny 04 December, 2018, 13:57Be the first to give this comment the thumbs up 0 likes

Anyone know what Prepaid Physical and Prepaid Virtual will go through as?? same as credit???

Jens Bader
Jens Bader - MIR Limited - London 04 December, 2018, 14:201 like 1 like

Prepaid Physical = Debit (consumer)

Prepaid Virtual (=CNP only, Commercial IC), has commercial Inter-debit IC.

A Finextra member
A Finextra member 05 December, 2018, 13:29Be the first to give this comment the thumbs up 0 likes

Anyone have a clue how the quoted "40%" reduction came about? Nothing is published!

Featured Job
All Jobs »