Tuesday, March 4, 2008
MasterCard seeks annulment
MasterCard Europe, the entity responsible for managing MasterCard Worldwide's business in Europe, applied to the European Court of First Instance to annul the European Commission's (EC) ruling on the company's cross-border interchange fees. The EC's December 2007 decision requires MasterCard to repeal its intra-European Economic Area fall-back interchange fees by June 21, 2008.
The ruling stated that European cross-border transaction fees for MasterCard and Maestro credit and debit cards violate EC treaty rules on restrictive business practices and that MasterCard's multilateral interchange fees inflate the cost of retailer card acceptance and offer no advantage to consumers or retailers.
MasterCard said the EC refused to acknowledge the fairness of the fees and failed to recognize interchange fees are needed for default settlements between banks issuing cards to customers and those handling merchant transactions.
"The commission's decision would not only be bad news for consumers but a blow to the European payments industry," said Javier Perez, President of MasterCard Europe. "From a business point of view, a payment system that does not allow for efficient recovery of costs is not sustainable in the long term, nor is it desirable because it limits the scope for innovation in payment services offered to consumers."
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