By DPA
Brussels : The EU Commission Wednesday ruled that MasterCard has violated the bloc’s competition rules by applying unnecessary fees on cross-border payment card transactions.
In a statement, the EU executive said such charges, levied on each payment at a retail outlet when the payment is processed, “inflated the cost of card acceptance by retailers without leading to proven efficiencies”.
MasterCard was told it had six months to withdraw the fees, which range from 0.4 percent to 1.20 percent of the value of the transaction, or face daily fines worth 3.5 percent of the company’s daily global turnover on the preceding business year.
“Multilateral interchange fee agreements such as MasterCard’s inflate the cost of card acceptance by retailers,” Competition Commissioner Neelie Kroes said.
“The Commission will accept these fees only where they are clearly fostering innovation to the benefit of all users,” Kroes added.
MasterCard uses a complex mechanism to determine a minimum price merchants must pay for accepting the organisation’s payment cards.
Such fees are applied on virtually all cross-border transactions as well as on domestic card payments in Belgium, Ireland, Italy, Czechoslovakia, Latvia, Luxembourg, Malta and Greece.
In its investigations, the Commission concluded that such fees were not justified.
Over 23 billion payments, exceeding a value of 1.35 trillion euros ($1.95 trillion), are made every year with payment cards in the EU.