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European Commission: We still don't believe MasterCard

Staff writer |
The European Commission sent a Statement of Objections to MasterCard. The Commision currently suspects MasterCard is artificially raising the costs of card payments.

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The Statement of Objections outlines the Commission's preliminary view that MasterCard's rules prevent banks from offering lower interchange fees to retailers based in another Member State of the European Economic Area (EEA), where interchange fees may be higher.

As a result, retailers cannot benefit from lower fees elsewhere and competition between banks cross-border may be restricted, in breach of European antitrust rules.

The Statement of Objections also alleges that MasterCard's interchange fees for transactions in the EU using MasterCard cards issued in other regions of the world breach European antitrust rules by setting an artificially high minimum price for processing these transactions.

The Commission made it clear that sending of a Statement of Objections does not prejudge the outcome of the investigation.

Commissioner Margrethe Vestager, in charge of competition policy, said: "Many consumers use payment cards every day, when they shop for food, clothes or purchase anything online. We currently suspect MasterCard is artificially raising the costs of card payments, which would harm consumers and retailers in the EU.

"We have concerns both in relation to the rules MasterCard applies to cross-border transactions within the EU, as well as the fees charged to retailers for receiving payments made with cards issued outside Europe. MasterCard now has an opportunity to respond to our charges".

Payments by card play a key role in the Single Market, both for domestic purchases and for purchases across borders or over the internet. European consumers and businesses are making more than 40 percent of their non-cash payments per year through payment cards.

Every time a consumer uses a payment card in a shop or online, the bank of the retailer pays a fee called an interchange fee to the cardholder's bank.

The acquiring bank passes the interchange fee on to the retailer who includes it, like any other cost, in the final price he charges consumers for his products or services. Interchange fees are thus passed on to all consumers, even to those who do not use cards but pay in cash.

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