20 December 2007
How foreign a transaction?
MasterCard calls them "multilateral interchange fees," and the European Union has ordered the credit-card giant to scrap them.
The fees, generated by cross-border transactions, bring in an estimated €10 billion a year, and, says the EU, customers wind up paying the tab:
The European competition commissioner Neelie Kroes said that consumers effectively ended-up footing the bill, "as they risk paying twice for payment cards: once through annual fees to their bank and a second time through inflated retail prices paid not only by card users but also by customers paying cash".
MasterCard will appeal the ruling, which may next be extended to archrival VISA Europe. This is not, so far as I can tell, related to the class-action suit against VISA, MasterCard and their issuing banks in the States over foreign-transaction fees.Posted at 8:01 AM to Common Cents