Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


MasterCard suffers setback fees fight

31 January 2014, 11:05

Luxembourg - MasterCard's five-year battle to keep multi-billion-euro cross-border card fees was dealt a blow on Thursday when an adviser to Europe's top court backed efforts to reduce such charges.

The legal opinion follows a European Commission ruling that said MasterCard's cross-border "interchange" fees - levied on retailers' credit and debit card transactions - broke antitrust rules and had to be changed.

Mastercard challenged this but the court adviser's recommendation now means it is likely to fail.

The EU antitrust regulator says such fees cost businesses across Europe €10bn ($13.64bn) a year.

Many consumer rights campaigners argue these hidden costs, charged when banks process payments by, for example, a German visiting London, are passed on to the consumer.

"I propose that the court should dismiss the main appeal (by MasterCard) and the cross-appeals," Advocate General Paolo Mengozzi at the EU Court of Justice said in his opinion.

The court, which will issue its judgement in the coming months, follows such advice in the majority of cases.

The opinion represents a setback to the world's second-largest credit and debit-card company after Visa. Mastercard says such interference would actually lead to higher costs for consumers and encourage the black economy.

The advice may also bolster support for proposed European Union rules to cap charges on card payments that have yet to be approved by EU countries and the bloc's parliament.

That crackdown is part of the Commission's push to boost e-commerce in the 28-country bloc and reduce costs for business.

Interchange fees are collected and kept by banks processing payments using cards. While MasterCard does not benefit directly from the charge, it fears a crackdown will discourage lenders from issuing its cards.


MasterCard, which faces increasing competition from rival payment schemes such as eBay's PayPal, was critical of the decision.

"Practical experience in countries such as Spain, Australia and the United States shows that capping interchange shifts the costs for transactions from retailers on to consumers," MasterCard President Javier Perez said in a statement.

"A one-size-fits all approach to interchange across Europe will drive the cost of cards up for consumers ... and ignores the very different market realities across European countries," he said.

EU retail lobby EuroCommerce, whose 1997 complaint triggered the first regulatory investigation into MasterCard, welcomed the recommendation.

"This should be another reason for the European Parliament to go forward with regulation on interchange fees," said Ruth Milligan of EuroCommerce.

MasterCard has said the value of cross-border card transactions is less than 5% of all purchases made by cardholders. A lower court threw out its challenge in 2012.

In the long-running dispute with the European Commission about such charges, MasterCard has made some concessions.

It agreed to reduce its debit card charges to 0.20% of a transaction and 0.30% for credit cards, pending this court ruling.

Rival Visa Europe, Europe's largest card network and the European licensee of Visa, has offered similar concessions.

- Reuters


Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Submitted by
Victor Tinto
Man who attacked US Embassy a 24 ...

A man who attacked the US Embassy in Nairobi was a 24 year old from Wajir County. Read more...

Submitted by
Victor Tinto
US Embassy to remain closed Frida...

The US Embassy in Nairobi will remain closed Friday following a terror attack on it Thursday. Read more...

Submitted by
Victor Tinto
Leave ODM if you are unhappy, Rai...

Leave ODM if you are not happy, Raila Odinga tells Senator. Read more...

Submitted by
Victor Tinto
Former Assistant Minister joins J...

A former Assistant Minister has quit PNU and joined the Jubilee Party. Read more...

Submitted by
Victor Tinto
DP Ruto intervenes as Kerio Valle...

DP William Ruto will visit Kerio Valley to try solve never-ending clashes between local residents. Read more...

Submitted by
Wilson Ochieng
ODM MP chased down by angry Kibra...

Kibra MP Ken Okoth had a hard time in his constituency after angry youth pelted him with stones. Read more...