European Commission sends supplementary statement of objections to Visa

The supplementary statement of objections refers to MIFs set by Visa for transactions with consumer credit cards in the European Economic Area (EEA). These MIFs currently apply to all cross-border transactions in the EEA, as well as to domestic transactions in eight EU member states (Belgium, Hungary, Ireland, Italy, Luxemburg, Malta, The Netherlands and Sweden). These inter-bank fees are paid by merchants banks (acquirers) to cardholders banks (issuers) for transactions with Visas consumer credit cards.

The Commissions preliminary conclusion is that these MIFs reduce price competition between banks by creating an important cost element common to all acquirers. The Commission considers that Visas MIFs harm competition between acquiring banks, inflate the cost of payment card acceptance for merchants and ultimately increase consumer prices.

Furthermore, the Commission considers that that rules obliging cross-border acquirers to pay MIFs applicable in the country of transaction hinder cross-border acquiring and maintain the segmentation of national markets. The Commission states that this breaches EU antitrust rules and prevents merchants from benefiting from lower MIFs in other member states.

A supplementary statement of objections is a formal step in EU antitrust investigations in which the Commission informs the parties concerned in writing of additional objections raised against them. The addressees can reply in writing, request a hearing and get access to the Commissions case file. The Commission may then take a decision on whether the conduct addressed in the supplementary statement of objections is compatible or not with EU antitrust rules.

Visas credit and debit cards represent approximately 41 percent of all payment cards issued in the EEA. Visa has an acceptance network within the EEA with over 5 million merchants accepting its payment cards. In recent news, Visa Europe has confirmed that almost 65 percent (the percentage is expected to rise to 90 when completely rolled out) of Verified by Visa (VbV) transactions in the UK will be done using password-free authentication.