EC to Again Review Visa Interchange

Publié le 26 février 2007 par European Union

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Visa's interchange fees are to come under renewed scrutiny, according to European Commissioner for Competition Policy Neelie Kroes.

In 2002, Visa made a deal with the European Commission (EC), under which it agreed to reduce interchange fees in return for immunity from antitrust action. The deal runs out at the end of 2007.

“When our exemption decision on Visa expires at the end of this year, we will look again at the effect of its interchange fees on competition,” Kroes said in a lecture given on February 19 at the London School of Economics.

In a separate investigation, the EC is already looking at MasterCard’s interchange fees.

Kroes said in her speech that she is concerned about the huge variation in payment card fees across the European Union's member states. She said that the European Commission's recent inquiry into the European retail banking and payment cards sector did not hear a convincing explanation for this discrepancy.

Kroes blames a lack of competition in the market for the variation in card fees across European Union member states. The way interchange fees are currently set increases costs for European businesses and consumers, Kroes said.

According to the EC, total credit and debit card transactions in the European Union amount to €1.3 trillion (US$1.7 trillion) a year, generating annual fees of around €25 billion for banks.

“Setting interchange at commercially viable rates is a vital element in our system,” Peter Ayliffe, President and CEO of Visa Europe, says in a statement. “Without interchange, it would be difficult to deliver SEPA (Single Euro Payment Area), and it could lead to the end of cards for all, as costs for consumers would increase.”