In September, the European Commission, which is responsible for enforcing competition regulations within the EU, distributed questionnaires to retailers and payment service providers regarding both Visa and Mastercard. The deadline for providing responses to these questionnaires is October..
In the payment card industry, Visa and Mastercard have held a substantial market presence, prompting complaints from retailers about the so-called scheme fees imposed by these companies. Additionally, concerns have been raised regarding the lack of transparency surrounding these fees.
Scheme fees are levied by operators of card payment systems for services associated with participation in their card networks.
Upon being contacted by Reuters for commentary on the document, the European Union antitrust authority responded that they are unable to provide further remarks due to the ongoing nature of the investigation.
It is understood that these questionnaires serve as a means for EU regulators to gather information and build an antitrust case. If the case is successfully pursued, it may result in substantial fines of up to 10% of a company's global revenue.
Among the inquiries posed is whether the variety of fees within the European Economic Area (EEA), which includes the 27 EU nations plus Iceland, Liechtenstein, and Norway, and the ongoing introduction of new fees alongside the removal of existing ones, have negatively impacted retailers' operations from 2016 to 2023.
The questionnaire also seeks to determine if retailers and payment service providers are involved in discussions regarding the introduction and removal of fees, as well as any increases in fees.
A spokesperson for Visa indicated that the company received a request for information from the Commission in late August and is currently working to provide the necessary information.
Mastercard stated that governments and regulators globally seek transparency regarding industry operations, describing this as a straightforward request for information.
Retailers and payment service providers have been inquired about their ability to negotiate scheme fees, processing fees, and innovation fees with Visa and Mastercard, as well as whether these negotiations are contingent upon the acceptance of specific products from these companies.
Processing fees are imposed by entities involved in card payment systems on payment service providers for services related to the authorization, clearing, and settlement of card transactions.
European regulators are also interested in whether retailers and payment service providers are informed about the levels of behavioral or compliance fees and fines imposed by Visa and Mastercard, along with the rationale behind them.
EuroCommerce, which represents members such as Amazon, Carrefour, H&M, IKEA, Metro, and REWE Group, indicated that increases in scheme fees and the introduction of new fees have largely negated the reductions in card fees that followed the 2015 Interchange Fee Regulation.
The lobbying organization calculated that in the year 2022, this situation was costing the EU economy roughly 1.5 billion euros annually.
With over 800 distinct scheme fees, EuroCommerce noted that acquirers encounter difficulties in implementing them accurately, and merchants frequently find it challenging to grasp their value or the cost structure that the schemes assert, it added.
In May, the UK's Payment Systems Regulator raised similar concerns regarding these fees, stating that there is insufficient evidence to suggest that significant fee increases have resulted in substantial service improvements.