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.
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