European Union: Commission Accepts Commitments Regarding Visa Debit Card Transactions

The Commission has accepted the commitments offered by Visa Europe ('Visa') to significantly cut its multilateral interchange fees ('MIFs') for debit card payments. Under the legally binding commitments, the maximum weighted average MIF applicable to debit card cross border transactions (and to national debit transactions in those countries where MIFs are set directly by Visa) will be cut to 0.2% of the value of the transaction. This represents a reduction of about 60% on average for domestic MIFs and 30% for cross-border MIFs.

The MIF is a bank-to-bank fee for card payments that is collectively fixed by Visa's member banks, but is ultimately paid by consumers.  The reduction reflects the application of the 'merchant-indifference methodology', which seeks to set the MIF at a level at which merchants have no preference whether a payment is made with a Visa debit card or with cash.

In addition, Visa has committed to maintain and further develop measures which will increase transparency and competition in the payment cards markets.  Visa commits for example to the unblending of merchant fees (which should increase the transparency of the fees charged for processing different types of cards), full visibility and the electronic identification of commercial cards, and the possibility for merchants to freely choose to accept VISA, VISA Electron, or VPAY debit cards.

Having market tested the commitments, the Commission considers that they remedy its competition concerns and has accordingly closed part of its investigation (under Article 9 of Regulation 1/2003). 

The commitments will be binding for four years and will be monitored by a trustee. The Commission may re-assess the competitive situation on the market after the commitments have expired.

The proposed reduction is in line with MasterCard's fee reductions which were implemented in April 2009.

This decision does not cover MIFs for consumer credit and deferred debit card transactions which the Commission will continue to investigate.

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