The European Commission said on Wednesday it had launched an antitrust probe into Visa Europe's charges for cross-border transactions.
The European Union's antitrust watchdog said in a statement the investigation would seek to establish whether the multilateral interchange fees Visa Europe charged for cross-border transactions within the EU using Visa branded consumer payment cards constitute infringements of the antitrust rules of the 27-nation bloc.
The fee in question is a charge on each payment at a merchant outlet, retained by the customer's bank, the issuing bank, and charged to the merchant's bank, or the acquiring bank, which then takes this cost element on board in setting its prices to merchants.
An "Honor-All-Cards-Rule" obliges merchants to accept all valid Visa-branded cards, irrespective of the identity of the issuer, the nature of the transaction and the type of card being issued.
Visa won a multi-year exemption from the commission in 2002 after it agreed to reduce progressively the level of its fees from an average of 1.1 percent to 0.7 percent until the end of 2007 and to cap fees at the level of costs for specific services. However, the exemption expired at the end of last year.
Last December, the commission ordered Visa's main rival MasterCard to withdraw same charges on cross-border payment, threatening with penalty for non-compliance.
It said then the fees inflated the cost of card acceptance by retailers without leading to proven efficiencies.
In the EU, over 23 billion payments, exceeding a value of 1350 billion euros, are made every year with payment cards.
Approximately 45 percent of all payment cards in the EU either bear a MasterCard or a Maestro logo, according to the commission.
Source:Xinhua
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