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Visa, Mastercard offer to cap tourist card fees to end EU probe

Reuters  |  BRUSSELS 

By Foo Yun Chee

(Reuters) - Visa and have offered to cap the fees charged on card payments made by tourists in the to stave off fines and end an EU antitrust investigation.

The European Commission, which has waged a decades-long crackdown on payment and credit card fees, says so-called interchange fees in which the merchant's pays a charge to the cardholder's bank, result in higher prices for consumers.

This is because the fees, which are a lucrative source of revenue for banks, are ultimately borne by the merchant.

Visa, the world's largest payments network operator, and its closest rival have proposed a 0.2 percent fee on non-EU debit card payments carried out in shops and a 0.3 percent fee on credit card payments, the Commission said on Tuesday.

This would bring their fees in line with those charged for EU cards, which were the subject of a long EU investigation after a 1997 complaint by business lobby

The group, whose members include , , and Metro , welcomed the offer but criticised the big difference in online and offline transaction fees.

Under the terms of the offer for online payments, debit card charges would be 1.15 percent and 1.50 percent for and the commitments would apply for five-and-a-half years.

"No such distinction is made for cards issued in the EU... We therefore cannot understand why merchants should be charged more for a perceived risk which can only arise by the card issuers' failure to implement adequate fraud prevention measures," the lobbying group said.

SAVINGS CALL

European group urged merchants to pass on the cost savings to consumers.

Third parties have a month to provide feedback before the Commission decides whether to accept the offer, which was revealed by last month, or demand a bigger reduction.

said it expected to incur a $650 million charge in the fourth quarter of this year because of a substantial fine related to a second EU antitrust investigation.

The Commission three years ago charged the company with imposing rules which blocked banks in one EU country from offering lower interchange fees to a retailer in a second EU country. Mastercard scrapped this practice in December 2015 after the bloc adopted rules capping such charges.

"The case is still ongoing and we cannot comment further on it," Commission said.

(Reporting by Foo Yun Chee; Editing by Philip Blenkinsop/Edmund Blair/Alexander Smith)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, December 05 2018. 01:02 IST
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