CCR World Magazine

CMS Payments Intelligence comments on important ruling issued this morning. The European Union General Court upholds the European Commission’s decision against the way MasterCard sets interchange rates on European cross border credit and debit card payments that are unfair and anti-competitive.

Brendan Doyle, CEO of CMS Payments Intelligence, a specialist advisory firm that is working with UK retailers to have interchange fees reduced (and who is presenting a request for regulation to Chancellor George Osborne on behalf of over 20 major retailers and other interested parties on 31 May), said:
 
“The EU Court is the knight in shining armour for retailers and ultimately their customers too.  The hidden and complex fees retailers face for accepting credit and debit cards have been ratcheted-up unfairly and consistently over a long period, and MasterCard has now lost its appeal to resist regulation of its powerful market position.
 
“While this ruling only applies to cross-border payments in Europe, for instance when tourists and business people use their cards intra regionally within Europe, the principles set are much broader and it will open the door to greater regulation of hidden interchange fees domestically in the UK and Europe.
 
“We expect government regulation to happen soon now the judgment has been given.  On the basis of this ruling, the regulation of these hidden costs on accepting credit and debit cards will lead to savings of up to £700 million per year for British retailers.  Given the very thin operating margins and the high insolvency rate of shops, this is very good news for retailers. The ruling is also good news for shoppers since these fees get passed on as higher costs, increasing the prices paid by all customers.”

(Source - CMS Payments Intelligence Comment)