European vacations are expensive enough without having to pay extra credit card fees when purchasing that Eiffel Tower souvenir. But those fees will be short-lived if regulators at the European Commission get their way.
The antitrust authority recently launched an investigation into MasterCard Inc.’s practice of charging non-EU card holders for using their credit and debit cards to make purchases within the 27-state region. The regulators are also scrutinizing the company’s “honor all cards” policy, which requires merchants to accept premium cards, which come with higher fees.
“The interbank fees are generally passed on to the merchants, leading to higher overall fees for them,” the commission said in a statement Tuesday. “Ultimately, such behavior is liable to slow down cross-border business and harm E.U. consumers.”
In 2007, the commission ruled that the company could no longer charge cross-border fees within Europe, a decision that MasterCard has challenged. The company did agree to cap debit and credit card fees at .20 percent and .30 percent of purchases, respectively, while the appeal is pending.
MasterCard could face fines of up to $740 million if found guilty, Thomson Reuters reports. The commission plans to propose inter-bank card fee regulations, designed to “ensure legal certainty and a durable level playing field across the EU,” before this summer.
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