By Vanessa Mock
BRUSSELS--European Union regulators Wednesday accepted an offer
from Visa Europe to cap its interbank fees at the same level as
MasterCard Inc. to settle an antitrust probe.
Europe's largest card payments company will cut the fees it
charges retailers to 0.3% of the value of each transaction, a
reduction of between 40% and 60%, the European Commission said.
Rival MasterCard agreed to cap fees at that same level in 2009.
Visa Europe made the offer last year to cut the so-called
multilateral interchange fees (MIFs), which are paid by retailers'
banks to cardholders' banks and are fixed jointly by the retailers'
banks.
The deal will also create a level playing field across the
continent by obliging all banks to set the same, capped Visa rates
to merchants, including for those based in another EU country.
Until now, merchants with high MIFs in their home country didn't
benefit from lower rates in another country, leading to wide
discrepancies of charges. The owner of a midsize business in Cyprus
with a EUR100,000 daily turnover and a third of sales paid for with
a Visa debit card, would currently pay EUR130,000 more a year than
he would in Finland, where the MIF levels are far lower, the
commission said.
The commitments "are excellent news for European consumers,
since the fees paid by retailers end up on their bills," said the
EU's antitrust chief, Joaquín Almunia.
Visa Europe is owned and operated by more than 3,000 European
financial institutions and enjoys a 40% market share in the credit
and debit card market in Europe. More than five million merchants
accept its cards.
As part of its agreement with the commission, the firm agreed to
reduce interbank fees for cross-border transactions to 0.3% for
credit and 0.2% for debit transactions. It will also simplify its
interbank fee structure and make the invoicing of card acceptance
services more transparent to merchants.
Visa Europe said in a statement that the agreement would provide
"legal certainty" and would "focus on developing and providing
payment solutions for the benefit of consumers, rather than
pursuing lengthy legal cases."
The commitments are legally binding on Visa for four years and
come nearly five years after the EU's antitrust watchdog filed a
formal complaint against the company.
The Commission said it is continuing proceedings against Visa
Inc. in relation to its international interbank fees, which are
fees that apply when a card holder from outside the Visa Europe
territory, such as the U.S., uses a Visa credit card to make a
purchase in Europe.
Despite sharing a brand name, Visa Inc. and Visa Europe are
separate entities that run their own clearance systems. Visa Europe
is owned and governed by its European financial institutions and is
a licensee of New York-listed Visa Inc., which receives royalties
from the European firm. Visa Europe is also a minority stockholder
in Visa Inc.
MasterCard was told by European regulators to cap its fees in
2007 on the grounds that they were too high and flouted competition
rules. MasterCard subsequently challenged that decision, which was
upheld by the EU's General Court, the bloc's second highest court,
in 2012.
Marcin Sobczyk, Andrew R. Johnson and Dana Cimilluca contributed
to this article.
Write to Vanessa Mock at vanessa.mock@wsj.com
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