By Foo Yun Chee
BRUSSELS (Reuters) - Visa and Mastercard have offered to cut merchants' charges for non-EU credit and debit cards by at least 40 percent to end an EU antitrust investigation, part of a decades-long crackdown by the European Commission against such fees.
The European Union competition enforcer said interchange fees in which the merchant's bank pays a charge to the cardholder's bank which then passes the cost to the merchant, result in higher consumer prices.
Visa, the world's largest payments network operator, and No. 2 player Mastercard have proposed a 0.2 percent fee on debit card payments carried out in shops and a 0.3 percent fee on credit card payments, the Commission said on Tuesday.
The changes would bring their fees in line with those charged for EU cards, which were also the subject of a lengthy EU investigation, triggered by a 1997 complaint by business lobbying group EuroCommerce.
For online payments, debit card charges would be 1.15 percent and 1.50 percent for credit cards. The case affects foreign tourists using their cards in the 28-country bloc.
The commitments would apply for five-and-a-half years.
Third parties have a month to provide feedback before the Commission decides whether to accept the offer which would be valid for five years and six months or demand a bigger fee reduction. Reuters reported on the offer from Visa and Mastercard last month.
Mastercard 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.
(Reporting by Foo Yun Chee; Editing by Philip Blenkinsop and Edmund Blair)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)