MasterCard and EU Regulators Ready for Battle Again
by May 19, 2015 2:31 pm0
According to reports from Bloomberg, MasterCard is set to go head to head again with EU regulators on the never-ending issue of interchange regulation. Sources close to the EU antitrust regulators have suggested that MasterCard is set to receive an antitrust complaint regarding interchange prices and controls. According to Bloomberg, regulators may send a statement of objections to MasterCard before the end of July which usually acts as a precursor to a massive fine.
While MasterCard could fight the case and protract legal proceedings, the history of such a strategy has not been positive with MasterCard and Visa (in separate legal battles) generally losing their case in front of European regulators when it comes to interchange. Ruth Milligan, senior adviser on payment services at EuroCommerce said,
“settlement would be more advantageous from MasterCard’s point of view.”
With the EU legislators recently passing interchange caps on both debit and credit transactions one might have expected the card networks to be spared further investigation. Especially when it is estimated that the interchange caps will cut revenue from debit and credit transactions by 6 billion euros ($6.8 billion) per year. While legal uncertainty will continue around interchange and MasterCard and Visa, one thing for certain is that this will not be the last time interchange is raised as an issue in Europe or around the world.
Overview by Tristan Hugo-Webb, Asspcoate Director, Global Payments Advisory Service at Mercator Advisory Group
Read the full review