- Mastercard, Visa to Cut Transaction Fees in Europe
Mastercard and Visa plan to cut transaction fees on purchase made in the Euro-area with foreign issued debit and credit cards, the payment companies hope the move will put an end to their long-standing antitrust battles with Brussels.
Retailers in the region will experience 40 percent reduction in transaction fees on purchases made in the European Economic Area using Mastercard, Maestro, Visa, Visa Electron and V-Pay credit and debit cards issued in the countries outside the EEA.
According to the agreement released on Monday by the companies, the fee on in-store purchases will drop to 0.2 percent of the transaction value for debit cards and 0.3 percent for credit cards.
While online purchases will attract a maximum of 1.15 percent of the transaction value for debit cards and 1.50 percent for credit cards.
European competition commissioner, Margrethe Vestager, said the binding promises would “reduce the costs borne by retailers” and, along with earlier decisions, “lower prices for European retailers to do business, ultimately to the benefit of all consumers”.
The new transaction fees on foreign-issued cards will come into effect on October 19 and apply for five years.
The commission could fine the companies up to 10 percent of their global turnover if they fail to meet their commitments.
Visa said it “played a central role negotiating a resolution that achieves the best outcome for all parties”.
Mastercard said it saw “the closure of this antitrust chapter as an important milestone for the company”.