Visa Europe Proposes Fee Cuts to Appease EU Regulators
By Alessandro Torello
May 14, 2013 9:56 am ET
BRUSSELS— Visa Europe has proposed cutting some of the fees it charges for the use of its credit cards, in a move that could resolve a a long-running antitrust probe by European Union regulators, the EU said Tuesday.
The European Commission, which has antitrust powers in the EU, said Visa Europe is proposing to cap its so-called interbank fees for credit-card payments to 0.3% of the value of transaction—representing a cut of about 40%-60%—for international transactions, as well as domestic ones in 10 countries.
Visa Europe will also tweak its rules, allowing banks to apply reduced fees for international transactions, a commitment that the commission said could lead to "considerably lower rates."
The commission will in the next few weeks ask competitors, customers and other interested parties for comments on Visa Europe's proposals. If the commitments don't raise any relevant concern, it will after a month make them legally binding, meaning that the company would be fined if it breached them.
Multilateral interchange fees, known as MIFs, are charged for consumer card transactions in the European Economic Area—the 27 EU countries plus Norway, Iceland and Liechtenstein. The credit-card companies typically don't make money out of the fees, which are charged by a cardholder's bank to a merchant's bank for each transaction made with a card. A higher fee gives banks an incentive to issue the company's cards rather than those of competitors.
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