Maltese consumers are expected to benefit from lower prices, at least theoretically, as traders will see their Visa charges slashed following the intervention of the European Commission.

Following a warning given by Brussels, Visa Europe has now proposed to reduce its interbank fees for debit card payments, known as MIFs.

Multilateral interchange fees (MIF) are bank-to-bank fees set collectively by Visa Europe's member banks for card payments, which is ultimately paid by the consumer. The EU executive found that in 2009 the MIFs were disproportionate and could hamper competition between banks for the acceptance of payment cards without benefiting consumers by contributing to technical and economic progress.

Visa Europe has now proposed to lower to 0.20 per cent of the final price of a product or service the fee that is collectively determined and charged between banks for payment by debit card.

The fee is integrated in the price that banks charge to merchants for processing the transaction, and therefore entails a cost that merchants include in the price of products they sell to consumers. The proposed reduction of 20 basis points is in line with the unilateral undertakings given by MasterCard in April 2009.

The reduction reflects the application of the "merchant-indifference methodology", which seeks to establish the MIF at a level at which merchants will be indifferent as to whether or not a payment is made by Visa Europe debit cards or in cash.

According to the Commission, Visa Europe's proposal will now be market-tested with a view to adopting a formal decision. At the conclusion of this procedure, the commitments will become legally binding and the Commission will drop its anti-trust investigation as far as MIFs for debit card transactions are concerned.

The Commission said that Visa's proposal does not concern MIFs for consumer credit and deferred debit card transactions, which will be included in the ongoing anti-trust investigation by the Commission covering past MIFs for such transactions. The proposed commitments are also without prejudice to the Commission's right to initiate or maintain proceedings against Visa Europe, such as the "honour all cards" rule, MIFs for commercial card transactions and interregional MIFs.