Commitments offered by Visa and Mastercard on interchange fees being scrutinised by the European Commission.

This article was written by​ Dr Annalies Muscat and Dr Laura Spiteri.​

Following the issue of a Statement of Objections by the European Commission (the 'Commission') against Visa and MasterCard regarding the competition concerns raised by inter-regional interchange fees ('inter-regional MIFs') for payment card transactions, the Commission is inviting any interested parties to comment on the commitments that have been proposed by Visa and MasterCard separately.

Inter-regional MIFs are fees applicable to payments made in the European Economic Area (the 'EEA') using debit or credit cards which had been issued outside the EEA. The Commission had issued a Statement of Objections against Visa in 2017 and against MasterCard in 2015 since Visa and MasterCard had set the level of MIFs to be applied by their licensee banks in cases where there was no bilateral agreement between the banks setting the level.

Since Article 101 of the Treaty on the Functioning of the European Union (the 'TFEU') prohibits anti-competitive agreements and concerted practices which have the object or effect of preventing or restricting competition on the internal market, the Commission had concerns about this arrangement. It considered that such rules may anti-competitively increase prices for European retailers accepting payments from cards issued outside the EEA which would in turn lead to higher prices for consumer goods and services in the EEA.

In terms of EU competition law, companies that are investigated by the Commission can offer commitments to meet the Commission's concerns. MasterCard and Visa have done so, and they have offered commitments that would reduce the inter-regional MIFs by at least 40%.

The proposed commitments and more information about these cases can be found here.