Networks Propose 40% Reduction in Inter-Regional Interchange for European Merchants
December 13, 2018
Mastercard and Visa have each committed to reduce the fees known as inter-regional multilateral interchange fees (MIFs) that issuers charge European merchants for transactions using cards issued outside Europe by 40 percent. The European Commission last week invited public comments on the proposals offered separately by Mastercard and Visa. The EC has been seeking such commitments from the card networks on inter-regional MIFs since 2015.
In addition to addressing the interchange charged on in-store transactions, the companies made provisions to reduce fees on card-not-present transactions as well. Under the terms of the agreements, Mastercard and Visa proposed to set inter-regional MIFs for online payments at 1.5 percent of the transaction value for credit card purchases and 1.15 percent of the transaction value for debit card purchases.
The companies also pledged to not circumvent the caps by implementing other fees and to publish all of the fees covered in the proposal.
In a statement, the EC said it invites all stakeholders to submit their views on the commitments proposed by the card brands within one month of their publication in the EU's Official Journal. After reviewing the comments, the Commission said it will make a final recommendation.
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