Friday, August 3, 2012
Visa's multilateral interchange fees (MIFs) may violate European Union antitrust rules, the EC contended in a formal statement of concerns the EC has about the card company's interchange policies. The EC informed the card company of its views in a supplementary statement of objections released July 31, 2012.
The EC told Visa it believes the company's interchange fees violate antitrust rules by restricting competition between banks and infringing on EU antitrust rules prohibiting cartels and restrictive business practices. The EC also expressed doubt that Visa's interchange fees are necessary to make the market efficient and therefore the company's interchange fees do not qualify as an exception to EU antitrust rules.
"The Commission considers that Visa's MIFs harm competition between acquiring banks, inflate the cost of payment card acceptance for merchants and ultimately increase consumer prices," the EC said in a statement. "The Commission's analysis follows closely the judgment of the EU General Court of May 2012 in the MasterCard case, which fully upheld the Commission's finding in this respect."
The EC further claimed Visa rules requiring cross-border acquirers to pay MIFs handicap cross-border acquiring, and they violate EU rules by maintaining national market segmentation.
The supplementary statement of objection is a formal notification process in EC antitrust hearings. It is issued before the commission decides if the alleged anti-competitive behavior violates EU antitrust rules. The investigative target can choose to respond in writing or by requesting a hearing.
A representative of Visa Europe was contacted for a response but the spokeswoman was not able to respond by press time.
Swedish mobile payment application company iZettle said it can no longer process Visa cards in three European countries.
"Based on a policy decision by Visa Europe, we have no choice but to stop processing Visa card payments in Denmark, Finland and Norway," the company said in a July 30 blog. iZettle will continue to accept American Express Co. cards in Finland and Diners Club cards in Denmark and Norway.
iZettle is sometimes called Europe's Square Inc. because it sells a service similar to Square's that enables credit card payment through mobile smart devices. Visa Inc. is a Square investor.
Visa Europe limited the number of ATMs available in London during the Olympics to encourage consumers to use electronic payment alternatives. This strategy developed a glitch on Sun., July 30, when London's Wembley Stadium played host to an Olympic soccer match.
"The Stadium experienced some IT issues which prevented the processing of card payments," stadium operators said later after media reports described long lines and frustrated consumers forced to pay for food and souvenirs in cash.
"Wembley owns the IT infrastructure within the stadium and the problem was related to this, and not to Visa's systems," the statement said. The operators said the system is under review to ensure the problems do not occur again. 
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