PR - MasterCard to Fight Commission Ruling on European Interchange Fees

MasterCard Europe said that it will appeal to the European Court of First Instance today’s decision by the European Commission regarding MasterCard Europe’s default cross-border interchange fees. The Commission’s Order requires the company, among other things, to "repeal [its] Intra-EEA fallback interchange fees, as well as [its] SEPA/Intra-Eurozone interchange fees" within six months. The Order applies only to "interchange fees for MasterCard branded consumer credit and charge cards and for MasterCard or Maestro branded debit cards".

MasterCard Europe believes that it has strong grounds for its appeal. While it will comply with the Commission’s Order, the company said that it is prepared to take action so that its payment products remain competitive and continue to benefit the millions of European cardholders who use and merchants that accept MasterCard and Maestro cards.

MasterCard Europe said its decision to appeal is based on its firm conviction that market forces, not regulation, should drive key decisions such as the setting of interchange fees and retailers’ choices over which forms of payment to accept. The company also pointed to the experience in Australia, the only other jurisdiction in the world to regulate interchange fees, where consumers have ended up paying more for credit cards and receiving fewer benefits and less choice.

If left unchallenged and adopted by national regulators, the Commission’s approach would not only be bad news for consumers but a blow to investment and innovation in the European payments industry, resulting in slower implementation of the Single Euro(pean) Payments Area ("SEPA"), MasterCard Europe said today.

Commenting on the decision, Javier Perez, President, MasterCard Europe, said, "We are disappointed that after years of review of MasterCard Europe’s transparent, default cross-border interchange fees, the Commission failed to appreciate that without a mechanism to fairly share costs among all the participants in a payment system that functions across Europe and around the globe, consumers will be hurt. Although MasterCard Europe itself does not receive any revenue from interchange, it, like all other payment systems, must balance the needs of, and costs to, both cardholders and merchants in order to remain competitive and innovative."