Visa and Mastercard are offering to cut fees that are paid by merchants on tourists’ card payments made in the European Union — an effort that would help end an antitrust investigation in the region.
Reuters reported Tuesday morning (December 4) that that charges levied on merchants on these credit and debit transactions would be around 40 percent.
As has been reported, the European Commission has been tied to what the newswire billed as a “decades long crackdown … against such fees.” The interchange fee structure in place is one where the merchant bank pays a fee to cardholder’s bank, and the cardholder’s bank passes that cost to the merchant. The merchant passes that cost along to the end consumer in the form of higher prices.
The two card giants have proposed a 20 basis point fee on debit card payments and a 30 basis point fee on credit card transactions, as announced by the Commission. Those charges would be tied to in-store transactions. For online transactions, the debit card charges would be 1.15 percent and for credit cards that tally would be 1.5 percent.
As reports noted on Tuesday, third parties have a month-long commentary period and then the Commission will make a decision on accepting the fee structure proposed by Visa and Mastercard. The official fee proposal comes in the wake of a report last month from Reuters that the two companies would propose such a fee cut.