The reduction on cross-border fees would constitute a 30% reduction in charges on Visa debit cards, Commission spokeswoman Amelia Torres announced at a news briefing yesterday.
"I welcome Visa Europe's willingness to reduce multilateral interchange fees and to make its rules more transparent," Competition Commissioner Joaquin Almunia said in a statement on the agreement.
The Commission's agreement with Visa will not become legally binding until the executive has seen the results of a market test.
"The proposed commitments on immediate debit interchange fees are an important step towards the achievement of the Single Euro Payment Area (SEPA) and the continued displacement of inefficient cash transactions in Europe," said Visa Europe President and Chief Executive Officer Peter Ayliffe.
The announcement brings to a close discussions which had been handed down to Alumina after Neelie Kroes, the previous EU competition commissioner, decided there was not enough time before the end of her mandate to come to an agreement, said sources (EurActiv 27/01/10).
Retailers lament agreement
But retailers argue that a 0.2% reduction in multilateral interchange fees (MIFs) on debit cards - essentially charges paid by merchants when they accept card payments - is too small to inject more competition into the cards market.
The 0.2% reduction on debit cards mirrors an earlier agreement between the EU executive and Visa's main rival, MasterCard.
However, Visa was not asked to agree to the same reductions on credit card MIFs, which MasterCard had cut to 0.3% after negotiations with the Commission (EurActiv 02/04/09).
"We are very disappointed that the Commission has opted for this marginal way out on Visa," said Xavier Durieu, secretary-general of retailers' lobby group EuroCommerce.
"Since EuroCommerce lodged the first complaints 13 years ago, neither Visa nor MasterCard have brought convincing justification for interchange fees on card transactions," Durieu added.
The European Commission is in favour of a European payments card to offset Visa and MasterCard's dominance of the market, but EuroCommerce argues that a 0.2% reduction will not provide enough incentive for a third payment scheme to come to fruition.
"Such a maximum figure will further undermine the efforts of the struggling third European card schemes: they will be quite unable to establish any system which offers a fairer pricing model," the lobby group's statement continued.
