Commission ruled against MasterCard Multilateral Interchange Fee - Eurocommerce

20 December 2007
by eub2 -- last modified 20 December 2007

At last! The European Commission ruled against MasterCard Multilateral Interchange Fee, to the benefit of all European consumers.

10 years after the launch of a formal complaint by
EuroCommerce and a few days before the official start of SEPA, the Commission ruled yesterday that MasterCard and Maestro interchange fee violates European competition rules and inflates the cost of card acceptance for retailers, to the detriment of all European consumers.

"This is great news for all consumers in Europe: it will mean lower prices", said Senator Feargal Quinn, President of EuroCommerce. "We would like to congratulate Commissioner Kroes for creating a better level playing field for the 6 million small and large shops we represent in Europe", he added. "The outcome of this decision could exceed 10 billion euro per annum in the years ahead."

 "Consumers should not pay twice for the bill. Retail is a competitive sector where all actors compete on prices and services", Senator Quinn added. "We are happy to provide our customers with the possibility to pay with cards, but the price for this service must be fair".

Retailers had been complaining for years that they pay, through the interchange fees, for services from which they do not benefit. As demonstrated by the Commission, this restricts competition between banks.

EuroCommerce and its members had expressed huge concerns that a SEPA based on MIF cards (such as Maestro) would dramatically increase prices. "We are now more confident about the SEPA project", said Senator Quinn. "Abolishing the MIF for MasterCard was the only way to avoid a future monopoly of Maestro". EuroCommerce is now looking forward to tangible drops in fees for all retailers.

Despite its limited scope, yesterday's decision sets an important precedent. Indeed, many similar complaints have been launched in Europe as well as in South Africa, New Zealand and the USA, where competition regulators are closely monitoring the European situation. No doubt that today's decision will give them the arguments to solve their problems too.

Established in 1993, EuroCommerce represents the retail, wholesale and international trade sectors in Europe. Its membership includes commerce federations in 29 countries, European and national associations representing specific commerce sectors and individual companies.

EuroCommerce