On 26 February 2014, the European Commission rendered the commitments offered by Visa Europe legally binding. These commitments involve significantly cutting its multilateral interchange fees ("MIFs") for consumer credit card transactions. Two days earlier, on 24 February 2014, due to the commitments offered by MasterCard, the Netherlands Authority for Consumers & Markets ("ACM") decided not to start an investigation into the MIF practice of MasterCard.
An interchange fee (also known as an inter-bank fee) is charged by the cardholder's bank (issuing bank) to a merchant's bank (the acquiring bank) for each sale transaction. The multilateral aspect comes into play when the interchange fees are agreed upon by a number of issuing/acquiring banks.
The Commission observed substantial differences in the level of multilateral interchange fees across Member States and was concerned that the practice of setting multilateral interchange fees by credit card companies may harm competition within the EU (see also MasterCard and Others v. Commission (T-111/08); MasterCard and Others v. Commission (C-382/12 P)). National competition authorities are investigating MIFs in several Member States. In France, Poland and Hungary MIFs of both Visa and MasterCard have already been capped.
In the 26 February 2014 Commission commitment decision, the credit card MIFs of Visa Europe are capped at a weighted average of 0.3% per transaction. This cap relates to all consumer credit card transactions in the EEA where Visa Europe sets the MIF-rate. Moreover, from 1 January 2015 this cap of 0.3% per credit card transaction and the cap of 0.2% per debit card transaction which was made legally binding by commitments in 2010, will also apply to transactions with issuing banks outside the EEA (cross-border inter-bank fees).
The commitments offered by MasterCard are different from those of Visa Europe. MasterCard commits to cap the MIFs for consumer credit card transactions within the Netherlands according to a phased reduction scheme. Three months after the adoption of the commitments, MasterCard commits to cap the MIFs for consumer credit card transactions within the Netherlands at a weighted average of 0.7% per transaction. From 2015 on these MIFs will be capped at 0.5% per transaction and in 2016 the MIFs cap will be further lowered to a weighted average of 0.3% per transaction.
The commitments of Visa Europe and MasterCard differ with respect to their duration. Despite the fact that both commitments have a set duration of four years, the commitments offered by MasterCard will be terminated with the entry into force of the proposed Regulation on interchange fees for card-based payment transactions (COM(2013)550 final, 24-7-2013), while the commitments made binding on Visa Europe by the Commission will not automatically terminate with the entry into force of this Regulation.
