regulators have formally raised concerns that consumers could
be paying too much because of fees charged by Visa to process
cross-border credit card transactions.
The European Commission told Visa of its concerns about
"possible violations of EU antitrust rules" relating to Visa's
"multilateral interchange fees" (MIFs) system, which charges
retailers for the transactions they handle.
In a supplementary statement, the Commission says that its
preliminary view is that the Visa multilateral interchange fees
(MIFs) for consumer credit cards violate its rules designed to stop
cartels and restrictive business practices.
The EC says it thinks that MIFs "harm competition between
acquiring banks, inflate the cost of payment card acceptance for
merchants and ultimately increase consumer prices".
It also "doubts" that Visa's MIFs are "necessary to create
efficiencies that benefit merchants and consumers" and could
therefore be entitled to an exception from the
The supplementary statement is the latest stage in a lengthy
battle that saw Visa slash its multilateral interchange fees for
debit cards in late 2010 but refuse to back down credit
Visa can now make a written reply or ask for a hearing on
the issue which could see fines imposed of up to 10% of turnover
imposed for antitrust breaches,
Responding to the new development, Peter Ayliffe, CEO, Visa
Europe, says: "We are very disappointed that the Commission has
taken such a confrontational approach and was not willing to find a
solution to support investment and innovation in European payments
for the benefit of European consumers and to allow European
payments to compete globally."
In May an EU court dismissed Visa rival MasterCard's
challenge against an EC ruling that the firm's cross-border
interchange fees for both credit and debit cards violated
Meanwhile, both card giants are facing interchange problems
in the US: having agreed a $7.25 billion class action settlement
with retailers earlier this month, several major merchants,
including Walmart, have now come out against the plan.