April 7, 2009 - 2:39am
European Commission charged Visa Europe Inc. with anticompetitive practices in what relates to payment-card fees as MasterCard last week settled the issue with the European regulator. According to the commission Visa’s fee structure prevents competition among its issuing banks and makes stores accepting credit cards to incur high costs.
Earlier last week MasterCard announced significant fee reductions and now the EU commission expects further fee cuts on the $2.1 trillion of annual card payments made in 27 European nations.
The issue of changing the credit card fees is two faced as on one hand the commission asserts that fee reduction will benefit customers and retailers while some experts think ??? will significantly hit the industry. According to Lafferty Group research and consulting firm the terms of last week’s MasterCard settlement will reduce industry-wide fee revenue by 2.6 billion euros and halve the profitability of issuing credit cards.
Meantime Visa also opposes this point of view considering its services benefit consumers.
“I’m just staggered by this on a point of principle,” Visa Europe Chief Executive Peter Ayliffe told reporters on a conference call, adding he was “disappointed” not to at least reach a settlement on fees for debit cards. Besides, he also pointed to the fact that the commission made its conclusions on the basis of comparison credit cards with cash instead of other forms of credit.
“We’ve got quite a bit of evidence,” he said, that Visa’s card systems benefit consumers. He declined to specify numbers on the grounds that they will be the basis of his defense.
Earlier last week MasterCard announced significant fee reductions and now the EU commission expects further fee cuts on the $2.1 trillion of annual card payments made in 27 European nations.
The issue of changing the credit card fees is two faced as on one hand the commission asserts that fee reduction will benefit customers and retailers while some experts think ??? will significantly hit the industry. According to Lafferty Group research and consulting firm the terms of last week’s MasterCard settlement will reduce industry-wide fee revenue by 2.6 billion euros and halve the profitability of issuing credit cards.
Meantime Visa also opposes this point of view considering its services benefit consumers.
“I’m just staggered by this on a point of principle,” Visa Europe Chief Executive Peter Ayliffe told reporters on a conference call, adding he was “disappointed” not to at least reach a settlement on fees for debit cards. Besides, he also pointed to the fact that the commission made its conclusions on the basis of comparison credit cards with cash instead of other forms of credit.
“We’ve got quite a bit of evidence,” he said, that Visa’s card systems benefit consumers. He declined to specify numbers on the grounds that they will be the basis of his defense.