MasterCard and Visa undergo EU investigation

MasterCard and Visa undergo EU investigationAn investigation is to take place into MasterCard and Visa cards inter-banking fees. The problem came across when they found if a US tourist was to use one of these cards inside the EU the charges would be extremely high, much higher than those who live in the EU but are travelling to another country within the EU. The problem arises with MasterCard and Visa as well as other rival companies all trying to compete on their inter-banking charges.

It’s said that the companies could be charged $740m or 10% of their 2012 revenue which for MasterCard the revenue for 2012 is $7.391 billion and for Visa $10.4 Billion if they are to be found guilty by EU representatives. Both companies say they will fully co-operate with the investigation, If found guilty the fines could have quite a detrimental effect on their businesses.
Back in 2007 MasterCard had a similar probe into cross-border fees for within the European economic area and where found guilty and banned from making these charges. Yet MasterCard still say their aims are to “balance the interest of both customers and retailers”, it’s up to you whether you believe that or not but a reoccurrence of a similar investigation seems all too suspicious. “Ultimately, such behaviour is liable to slow down cross-border business and harm EU consumers,” where the claims against MasterCard and Visa.

The investigation seems to be set in stone as the Commission said there would be a submission of a proposition to inter-banking fees in the middle of the year to try and attempt to level the playing field for all card providers, essentially to avoid anything like this happening again. MasterCard and Visa will be hit hard in the pocket if anything like this was to go ahead, but I’m sure they’ll find another version of a loop hole again.