Following the Commission’s market test of Visa’s and Mastercard’s commitments offered on April 29, 2019, as reported in our December 2018 newsletter, the Commission accepted the companies’ commitments to cap their inter-regional multi-lateral interchange fees (“MIFs”).[1] The commitments put an end to the first publically reported probe into inter-regional MIFs by any antitrust authority worldwide, which was opened by the Commission in 2013.

While the imposed fine of €570 million—as reported in our Januar y 2019 newsletter— sanctioned Mastercard’s practice of restricting retailers’ ability to shop around the EEA for different banks to handle their payments (so-called “cross-border acquiring”), the present commitments address the Commission’s concerns that high inter-regional MIFs for transactions using cards issued outside the EEA might increase prices for European retailers and, ultimately, European consumers. Both parties separately offered to cap their inter-regional MIFs at 0.2% of the transaction value for debit card payments and 0.3% for credit card payments at a physical point of sale, bringing the inter-regional MIFs into line with the intra-EEA MIFs under the Interchange Fee Regulation.[2] For online payments, the parties offered to cap their inter-regional MIFs at 1.15% of the transaction value for debit card payments and 1.5% for credit card payments. The higher cap for online payments accounts—somewhat unconvincingly—for a higher risk of fraud, although the Interchange Fee Regulation makes no such distinction for cards issued in the EEA, and critics have pointed out that this risk would be better addressed through adequate fraud prevention measures by card issuers. The commitments will take effect six months after the Commission’s acceptance and will be binding for five and a half years after taking effect. The Commission concluded that the capped inter- regional MIFs will not exceed retailers’ costs for alternative means of payment including e-wallets for online payments and cash payments in store, the latter of which generate costs such as cash counting and reconciliation, identifying counterfeit notes, and transport of cash to and from the bank.[3]

[1]      Inter-regional MIFs are fees that apply to payments made within the EEA with consumer debit or credit cards issued outside the EEA. Commission Press Release (IP/19/2311), “Antitrust: Commission accepts commitments by Mastercard and Visa to cut inter-regional interchange fees”, April 29, 2019.

[2]      Regulation (EU) 2015/751 of the European Parliament and of the Council of 29 April, 2015 on interchange fees for card-based payment transactions, OJ L 123/1.

[3]      See European Commission, Survey on merchants’ costs of processing cash and card payments, March 2015, available at sectors/financial_services/dgcomp_final_report_en.pdf.