EU Investigates Visa and Mastercard Fees

By Foo Yun Chee

BRUSSELS (Reuters) – EU antitrust regulators are investigating whether the fees charged by Visa (NYSE:V) and Mastercard (NYSE:MA) negatively impact retailers, as revealed in an EU document.

The European Commission, which upholds EU competition rules, distributed questionnaires about Visa and Mastercard to retailers and payment service providers in September, allowing responses until October.

Visa and Mastercard have long held a dominant position in the payment card market, leading to complaints from retailers regarding scheme fees and a perceived lack of transparency.

Scheme fees refer to charges imposed by a card payment system operator for services linked to participation in the card system.

The EU antitrust authority stated there would be no further comments while the investigation is ongoing.

These questionnaires typically assist EU regulators in building an antitrust case, which may result in fines of up to 10% of a company's global revenue if successful.

Questions posed include whether the number of fees in the EEA (European Economic Area), which encompasses 27 EU countries plus Iceland, Liechtenstein, and Norway, and the ongoing addition and removal of fees have adversely affected retailers between 2016-2023.

Additionally, retailers and payment service providers were queried on whether they have been consulted regarding the introduction or modification of fees.

A Visa spokesperson confirmed receiving a request for information from the Commission in late August and indicated they are working on providing the relevant data.

Mastercard commented that global regulators seek visibility over industry operations and that their request is merely for information.

Retailers and payment service providers were also asked about their ability to negotiate various fees with Visa and Mastercard, and whether these negotiations are contingent on accepting specific products.

Processing fees, charged by entities including card payment system operators, are related to technical processing services for authorizing, clearing, and settling card payments.

EU regulators further inquired if retailers are informed about behavioural or compliance fees imposed by Visa and Mastercard, along with the reasoning for those fees.

EuroCommerce, representing members such as Amazon (NASDAQ:AMZN), Carrefour (EPA:CARR), H&M (ST:HMb), IKEA, Metro, and REWE Group, reported that increases in scheme fees have offset reductions in card fees since the 2015 Interchange Fee Regulation.

It estimated the cost to the EU economy at around 1.5 billion euros annually as of 2022, citing over 800 different scheme fees that complicate accurate implementation by acquirers and understanding for merchants.

Britain's Payment Systems Regulator highlighted similar concerns regarding these fees in May, noting insufficient evidence that significant fee increases have led to service improvements.