The Commission has given the credit card giant six months to withdraw its Multilateral Interchange Fee (MIF), after deciding that for 15 years it has violated European competition rules by inflating the cost of card acceptance for retailers. If it fails to comply, the Commission may impose daily penalty payments of 3.5 per cent of Mastercard’s daily global turnover.
The news has been hailed as a major victory for the British Retail Consortium. It has argued for years that the interchange fees are far higher than the actual transaction costs incurred by the card firms.
Director-general Kevin Hawkins said he applauded the Commission’s decision. “This has been a long fight for the retail industry. Mastercard has clearly been abusing its position to bolster its bottom line and retailers and their customers are bearing the cost.”
He added: “The sooner Mastercard accepts this ruling the sooner customers will benefit from these cost reductions.
DSGi commercial manager for payments Peter Robinson welcomed the decision, saying it is a clear signal to the Office of Fair Trading that the present practice is anti-competitive. He added: “Our customers will benefit, because the reduction in operating costs will be reflected in lower prices.”
The MIF ranges from between 0.4 per cent and 1.05 per cent of the transaction value for payments with Maestro debit cards and between 0.8 per cent and 1.2 per cent for transactions made using Mastercard credit cards. The fee is retained by the customer’s bank and charged to the merchant’s bank.
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