LONDON, ENGLAND – Despite news earlier this week that Visa Europe has offered to reduce interchange fees on debit cards, a Retail Week column challenged whether the announcement will convince the European Commission to end its antitrust proceedings.
Earlier this week, Visa Europe announced a plan to test market reducing interchange fees by 60% for domestic transactions and 30% for cross-border fees, a move welcomed by European Competition Commissioner Joaquin Almunia. However, Retail Week urged retailers to restrain their optimism and to be skeptical of an imminent final resolution.
Among Retail Week’s arguments for this cautious approach is Visa’s non-mention of addressing credit card fees. Additionally, MasterCard has already been down a similar process with the EC, only to drop the plan after a subsequent move to raise membership fees that banks had to pay generated stiff protest from retailers.
The European Commission said that if the proposal is successfully market-tested, it will be made legally binding, and that it will no longer pursue antitrust investigation into Visa Europe debit card fees. Retail Week said that Visa’s omission of its credit card fees still presents retailers with significant financial challenges, making the issue far from resolved.
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