Sunday, 05 August 2012 00:23
It has been yesterday announced by the European Commissioners responsible for Competition that similar to what it had advocated some two years ago following a European Court decision on the Multilateral Interchangeable Fees (MIFs) or charges levied inter banks on every transaction made by retailers utilising the MasterCard and Maestro branded cards which charges then ranged between 0.4% and 1.2%, it is now insisting that Visa Europe were to adopt the same approach and do away with the relative fees.
Although the MIFs are charged to the retail outlet, at the end of the day, it would be the consumer who would be paying therefor. The EU has long considered the MIFs to be in breach of its competition law and practice.
Visa Europe’s argument that a minimum fee was necessary to guarantee for the success of its technical infrastructure so required to run the system has been rejected by the European Commission, counter-arguing that the setting of minimum prices for processing payments restricts inter-banking competition, inflates the cost of payment card acceptance and ultimately increases consumer prices.
In the EU, over twenty three billion payments, exceeding a value of €1,350 billion, are made every year through credit cards.
The removal of the MIFs by Visa Europe is not only applicable to inter-community transactions but also applies to all domestic transactions made by means of cards in Belgium, Ireland, Italy, the Czech Republic, Latvia, Luxemburg, Malta and Greece.