Brussels (Reuters): EU regulators have dropped antitrust charges against Visa after accepting the company’s pledge to cut its debit card fees to one lower rate for domestic and cross-border transactions across nine EU countries.
Visa will apply a 0.2 percent fee to all cross-border transactions and domestic purchases in Greece, Hungary, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Malta, and Sweden, which will be legally binding for four years.
The European Commission, which charged the credit and debit card network in 2009 with blocking competition between banks with its debit fees, tested Visa’s proposal to cut its fees to a standard rate in May.
The European Union executive said Visa’s new rate would mean a reduction of between 30 and 60 percent in its current fees.
The so-called interchange fees, which merchants pay to banks and processing networks like Visa and MasterCard Inc every time a customer uses a credit or debit card, are a major revenue earner for the companies.
Visa Europe, the European licensee of Visa Inc, gets more than 70 percent of its payment transactions through debit cards.
“Lower inter-bank fees will trigger real benefits for merchants and consumers whilst more transparent rules will also improve competition in the cards markets,” EU Competition Commissioner Joaquin Almunia said in a statement.
The Commission said it would now close its case on the issue.
Visa Europe said the changes would make it easier for European consumers to pay for their purchases abroad.
“The agreed commitments on immediate debit interchange fees and methodology are an important step towards the achievement of the Single Euro Payment Area (SEPA),” Visa Europe Chief Executive Peter Ayliffe said in a statement.
Visa Europe is still facing EU regulatory scrutiny over its charges for consumer credit and deferred debit card transactions.
MasterCard cut its transaction fees for its debit and credit cards last April in return for the Commission scrapping its investigation, but has gone to court to get a legal ruling on the issue.
Visa and MasterCard settled a U.S. Justice Department antitrust lawsuit over their processing rules in October.