Visa and Mastercard have proposed a reduction in the fees paid by merchants on accepting tourists’ card payments in the European Union (EU) in order to settle an antitrust probe, Reuters reported.
Although such payments are considered an attractive revenue source for banks, the European Commission has worked for almost a decade towards lowering interchange costs to boost cross-border trade.
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However, fees merchants face for non-EU cards are likely to be higher compared to EU cards even after the proposed reduction, the report noted.
The Commission is said to seek feedback from retailers as well as consumer groups before coming to a decision.
According to retailers, interchange fees count as a hidden cost with card providers paying billions of dollars in class action lawsuit settlements.
The Commission and Visa refused to comment on the matter.
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By GlobalData“At this time, we have no information to share on our ongoing engagement with the European Commission,” Mastercard was quoted as saying by Reuters.
Visa earlier came under the scanner when EU said that charging excessive fees from merchants for non-EU cards could ultimately increase cost of goods for consumers.
Similarly, it was alleged that Mastercard’s rules restrict banks in one country in the EU from providing lower interchange fees to a retailer in another EU country.
