Türkiye’s Competition Authority has started an investigation into Mastercard and Visa to determine if their scheme rules prevented payment institutions from offering services to merchants abroad.
The board mentioned that the investigation was launched to determine if the two companies violated competition rules by complicating the operations of payment service providers by offering international payment solutions. This could have been done by not allowing overseas businesses to use the payments or POS infrastructure offered by the banks working under the scope of Banking Law number 5411 to other payment service providers.
Investigated over competition rules violations
The authority mentioned that payment institutions operating in Türkiye can offer services to consumers seeking to make payments to merchants located abroad through bilateral agreements. Under these agreements, international payments are localised, and these transactions can be carried out without being subject to Mastercard or Visa's cross-border transaction fees.
Findings from the on-site investigations showed that, in this context, Visa and Mastercard were able to block the activities of payment institutions that entered bilateral agreements through different methods, such as imposing sanctions on banks on the grounds that they violated the scheme rules they had sent.
Additionally, another investigation was launched on the two companies, which operate in the global card payment systems market. The investigation will examine the allegations that Mastercard and Visa prevented the use of card payments and POS infrastructure by merchants located abroad and removed alternative payment solutions.
The lack of competition is beneficial for Mastercard and Visa. Merchants have faced steadily increasing card processing fees, with Visa and Mastercard raising rates by at least 25% above inflation since 2017. Following Brexit, Mastercard increased cross-border interchange fees between the UK and the EU fivefold, costing businesses and consumers millions in additional expenses.
