EC makes Visa Europe commitment on interbank card fees legally binding

The European Commission has made legally binding commitments offered by Visa Europe to significantly cut its multilateral interchange fees for debit card payments.

The MIF is a bank-to-bank fee for card payments that is collectively fixed by Visa Europe’s member banks, but is ultimately paid by consumers.

Under the commitments, the maximum weighted average MIF applicable to debit card cross border transactions and to national debit transactions in those countries where MIFs are set directly by Visa Europe will be cut to 0.2 per cent of the value of the transaction.

This represents a reduction of about 60 per cent on average for domestic MIFs and 30 per cent for cross-border MIFs. Furthermore, Visa Europe committed to maintain and further develop measures which will increase transparency and competition in the payment cards markets.

The Commission said it considered the offer suitable to remedy the competition concerns and closed part of its investigation through a commitments decision according to Article 9 of Regulation 1/2003 (the Antitrust Regulation).

Commission vice-president in charge of competition policy Joaquín Almunia commented: “Lower inter-bank fees will trigger real benefits for merchants and consumers whilst more transparent rules will also improve competition in the cards markets.”

The Multilateral Interchange Fees are collectively determined and charged between banks for each payment made with a debit card. These fees are integrated in the price that banks charge to merchants for handling a transaction and therefore entail a cost that merchants integrate in the price of the goods or services they sell to consumers.