European Commission hits Mastercard with EUR570 million fine over interchange rules

European Commission hits Mastercard with EUR570 million fine over interchange rules

The European Commission has bashed Mastercard with a EUR570 million fine for obstructing merchant access to low-cost cross-border payment services.

The financial penalty flows from an anti-trust investigation which kicked off in April 2013 and concluded that Mastercard's rules prevented retailers from benefiting from lower fees and restricted competition between banks cross border, in breach of EU antitrust rules.

The infringement ended when Mastercard amended its rules in view of the entry into force on new regulations of interchange fee caps in December 2015.

Prior to that, Mastercard obliged acquiring banks to apply the interchange fees of the country where the retailer was located. As a result, retailers in high-interchange fee countries could not benefit from lower interchange fees offered by an acquiring bank located in another Member State.

Commissioner Margrethe Vestager, in charge of competition policy, says: “European consumers use payment cards every day, when they buy food or clothes or make purchases online. By preventing merchants from shopping around for better conditions offered by banks in other Member States, Mastercard's rules artificially raised the costs of card payments, harming consumers and retailers in the EU.”

Comments: (2)

A Finextra member
A Finextra member 22 January, 2019, 12:22Be the first to give this comment the thumbs up 0 likes The EU fines Mastercard on the shortcoming of the alignment of competition law rules in the EU internal market for which the EU itself is liable. Some banks had banned MIF alltogether (Latvia) some capped it (eg Poland) and some done nothing. Which member state rules were merchants hindred to use? Latvia or Poland or Spain rules in the UK?
A Finextra member
A Finextra member 22 January, 2019, 12:38Be the first to give this comment the thumbs up 0 likes

Does this mean, for example, that a high average transaction value merchant paying an interchange fee of 0.2% for a domestic consumer debit card in the UK could route their debit card transactions through to a card acquirer in Spain where the interchange fee for transactions over €20 are capped at the lower of 0.2% or €0.07c?

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