Background on Key Players
Major European retailers and online commerce giants have urged the European Commission to curb the allegedly high fees charged by Visa and Mastercard, claiming that these fees harm the EU’s competitiveness and hinder its rivals.
Visa and Mastercard, both American companies, dominate the payment card market in the Eurozone, processing nearly two-thirds of all card payments. In recent years, these companies have faced complaints from retailers regarding their fees and the lack of transparency surrounding them.
Retailers’ Concerns and EU’s Response
The retailers’ complaints have prompted the European Union to explore alternatives like a euro digital currency to reduce reliance on US payment providers. However, the slow pace of legislative progress for a digital currency has frustrated some political officials and businesses.
“International card networks (ICS) have been able to increase their fees without competitive challenge or regulatory scrutiny. They’ve also made their fee system and standards so complex and opaque that market participants are unable to understand, let alone question, what they’re paying and why,” the retailers stated in a May 13 letter obtained by Reuters.
The retailers referenced a 2024 Brattle Group report showing an accumulated increase of 33.9% in ICS fees between 2018 and 2022 (averaging 7.6% annually) plus inflation, but found no corresponding improvement in service for EU merchants and consumers.
Retailers’ Demands
The retailers directed their letter to the Commission’s Competition Defense Commissioner, Teresa Ribera; Financial Services Commissioner, Maria Luís Albuquerque; and Economy Minister, Valdis Dombrovskis.
Signatories
Visa and Mastercard did not immediately comment on the matter. The signatories include EuroCommerce, Ecommerce Europe, Independent Retail Europe, the European Enterprise Treasury Association, and the European Digital Payments Industry Alliance. Notable members are Aldi, Amazon, Carrefour, eBay, H&M, Ikea, Intersport, Marks & Spencer, Worldline, Nexi, and Teya.
Key Questions and Answers
- Who are the main parties involved? Major European retailers and online commerce giants, along with Visa and Mastercard.
- What are the retailers’ main concerns? The retailers claim that Visa and Mastercard’s high fees harm the EU’s competitiveness and hinder its rivals.
- What is the EU’s response? The European Union is exploring alternatives like a euro digital currency to reduce reliance on US payment providers.
- Who are the signatories of the letter? EuroCommerce, Ecommerce Europe, Independent Retail Europe, the European Enterprise Treasury Association, and the European Digital Payments Industry Alliance.
- What was the content of the letter? The retailers expressed frustration with ICS’s ability to increase fees without challenge or scrutiny, and cited a report showing significant fee increases with no corresponding service improvements.
