EU regulators investigating whether Visa and Mastercard fees hurt retailers, document shows

EU antitrust regulators are investigating whether fees charged by Visa and Mastercard are having a negative impact on retailers, an EU document seen by Reuters showed.

The European Commission, which enforces EU competition rules, sent questionnaires about Visa and Mastercard to retailers and payment service providers in September, giving them until October to respond.

Visa and Mastercard have long dominated the payment card market, prompting complaints from retailers about so-called scheme fees charged by the two companies in recent years, as well as what they say is a lack of transparency. in them.

System fees are charged by the operator of the card payment system for services related to participation in the card system.

“We have no further comment to make as the investigation is ongoing,” the EU antitrust watchdog said when asked by Reuters to comment on the contents of the document.

These questionnaires often help EU regulators develop an antitrust case, which, if pursued and successful, can lead to fines of up to 10% of a company's global turnover.

Among the questions asked is whether the number of fees in the EEA, the 27 EU countries plus Iceland, Liechtenstein and Norway, in which the retailer is active and “the continued introduction of new fees and the removal of existing ones” affected negatively to its business in the period 2016-2023.

The questionnaire also asks whether retailers and payment service providers are consulted on the introduction and removal of fees and fee increases.

A Visa spokesperson said the company received a request for information from the Commission in late August and was working on it “to provide the relevant information.”

Mastercard said: “Governments and regulators around the world want to make sure they have a clear view of how industries work. That's what it is, a simple request for information.”

Retailers and payment service providers were asked whether they can negotiate scheme fees, processing fees and innovation fees with Visa and Mastercard, and whether such discussions are conditional on the acceptance of specific products from them.
Processing entities, including card payment system operators, charge processing fees to payment service providers for services related to technical processing to authorize, clear and settle card payments.

EU regulators also want to know whether retailers and payment service providers are informed about the level of behavioral or compliance fees or fines imposed by Visa and Mastercard and the justification given for this.

EuroCommerce, whose members include Amazon, Carrefour, H&M, IKEA, Metro and REWE Group, said plan fee increases and new plan fees have virtually eaten up the reduction in card fees following the Fees Regulation of Exchange 2015.

“We estimate that in 2022 this would cost the EU economy around €1.5 billion a year,” the lobby group said.

“With over 800 different scheme fees, we see acquirers finding it difficult to implement them correctly, let alone merchants who often do not understand their value or the cost basis the schemes claim,” he added.

Britain's Payment Systems Regulator flagged similar concerns about such fees in May, saying there is little evidence that large fee increases have led to a major improvement in service.