Visa Europe have offered to decrease domestic transaction fees on debit card transactions to help accommodate European Commission antitrust investigations. The fee cuts would amount to a maximum of 0.2 per cent on debit card purchases, a reduction of 60 per cent. The reduction on cross-border fees would be 30 per cent.
With ongoing investigations into unjustified fees embedded in the card systems for both Visa and MasterCard, Visa Europe confirmed they would reduce multilateral interchange fees and make some of its rules more transparent. MasterCard settled a similar case in 2009.
Visa Europe and MasterCard both operate a system where funds for a transaction flow between the purchaser, the purchaser's bank, the merchant's bank and then to the merchant, with the interchange fee being deducted between the two banks . The banks see the fees as necessary to help fund the development of their payment systems .
The EU has pointed out that interchange fees can be an illegal competitive constraint under rules that constrain companies from fixing their prices. Although still to receive formal approval, the move will bring down the cost of cards. The commission is still looking into Visa Europe's credit card fees.
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Visa Europe agrees to lower debit card fees
Tue, 27 Apr 2010
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