Brussels, 7 May 2004
Commission welcomes increased transparency in VISA and MasterCard cross border fees
The European Commission welcomes the announcements by VISA and MasterCard to publish the fees inherent to the use of a credit card outside the country were it was issued. These fees are not directly paid by the card holder but by the shops, restaurants and other businesses that accept the Visa and MasterCard cards in payment of the goods or services they sell. This development is intended to enhance retailers' ability to negotiate the fees with the banks that are part of the Visa and MasterCard card systems.
After discussions with the Commission, VISA and MasterCard recently and separately informed the Commission that they will publish their multilateral interchange fee rates for European cross border payments ("MIF") on their websites. This is a further step towards increased transparency of the MIF vis-à-vis retailers in their negotiations with merchant banks regarding fees ("discount rates") for transactions paid with VISA and MasterCard branded payment cards.
Interchange fees are paid by the bank of the merchant to the bank of the cardholder and they are in general the most important cost element of discount rates. Both VISA and MasterCard Europe establish the level of these MIFs in meetings of their respective regional boards. Merchant banks pass the MIF on to merchants who normally pass them on to consumers as part of their overall cost structure. The Commission has been investigating the MIFs of VISA and MasterCard under EU competition law for several years.
In accordance with the Commission's decision of 24 July 2002, Visa had already allowed its member banks to reveal information about the MIF levels for consumer cards and the relative percentage of the cost categories composing the benchmark, at which the MIF has to be capped. However, merchants have repeatedly complained to the Commission that their banks are reluctant to give full information on the MIF, although VISA allowed them to do so. VISA has now published the MIF for consumer cards and the weight of the relevant costs components on its website (see link below). MasterCard Europe offered to publish on its website some of its MIFs and, for some cards, the relative weight of the cost elements composing these fees, and recently confirmed to the Commission its intention to do so.
The Commission will continue to monitor how VISA complies with its commitments under the exemption decision. The Commission is also investigating MasterCard's rules and agreements, in particular those on the MIF. Recent investigations have shown that the payment cards technology develops very fast and that the rules governing payment card transactions remain of continued relevance to retailers and consumers.
Link to the Visa web page:
Link to the MasterCard web page: