Visa and Mastercard have reportedly agreed to extend caps on tourist card fees in Europe. As Reuters reported Friday (July 5), the card companies and European Union regulators had originally agreed to the caps five years ago, and will now extend them to 2029. The report notes that Visa and Mastercard had initially agreed to the fee cap — 0.2% […]
The post Visa and Mastercard Will Keep EU Tourist Fee Cap 5 More Years appeared first on PYMNTS.com.
Visa and Mastercard have reportedly agreed to extend caps on tourist card fees in Europe.
As Reuters reported Friday (July 5), the card companies and European Union regulators had originally agreed to the caps five years ago, and will now extend them to 2029.
The report notes that Visa and Mastercard had initially agreed to the fee cap — 0.2% on non-EU debit card payments made in shops and a 0.3% fee limit on credit card payments — to settle an EU antitrust investigation and escape steep fines.
The fee caps had been scheduled to end in November, and were originally put in place after a lengthy probe by the European Commission, the EU’s competition watchdog, prompted by a 1997 complaint by business lobby EuroCommerce. The European Commission said the two companies volunteered to extend the fee caps beyond 2024.
“Inter-regional interchange fees for debit and credit card transactions under these schemes will remain capped for another 5 years until November 2029,” it said in a statement.
The news comes days after a judge threw out a proposed $30 billion settlement between the two card companies and merchants that would have imposed limits on so-called “swipe fees,” levied each time a credit card is used.
District Justice Margo K. Brody, chief judge in the Eastern District of New York, had earlier said that she was “unlikely” to approve the settlement, which would have ended roughly 20 years of suits and countersuits and for which plaintiffs (which included several groups of merchants) had campaigned for preliminary settlement approval.
In the 88-page ruling released earlier this week, Brodie wrote that the settlement “falls short of the ‘best possible’ recovery” for merchants if the case proceeded to trial.
She argued that plaintiffs’ claims have already withstood summary judgment motions, putting them in a strong position.
“The insufficiency of the provisions detailed above is underscored by the Court’s denial of Defendants’ motion for summary judgment on all of Plaintiffs’ claims of anticompetitive conduct,” Brodie wrote.
A major feature of the rejected settlement was expanded ability for retailers to surcharge customers for credit card use. The settlement would have let merchants charge up to 1% on all Visa or Mastercard credit card transactions, no matter whether they surcharge other cards.
But Brodie argued these provisions offered little benefit to many large retailers, writing that “large national merchants are more likely to accept American Express and operate in states that prohibit surcharging, and therefore, these merchants ‘gain no appreciable benefit from the [Settlement],’ while merchants ‘that do not take American Express and operate in states that permit surcharging . . . derive a potentially substantial benefit.’”
The post Visa and Mastercard Will Keep EU Tourist Fee Cap 5 More Years appeared first on PYMNTS.com.
