The Office of Fair Trading says that Visa and its members,
including most major banks, are breaking competition laws by
agreeing a fee that is payable on card transactions. It follows a
similar ruling last month against MasterCard.
The
statement of objections focuses on what is called a domestic
multilateral interchange fee, or MIF. Last month, it dubbed
MasterCard's equivalent MIF as a "tax on consumers" because it
believes that the cost of the fees is passed on to retailers and
ultimately to consumers.
The OFT is of
the view that the collective agreement between Visa and its member
banks on the interchange fee charged between card issuing banks and
merchant acquirers, on Visa card transactions taking place in the
UK, restricts competition and infringes Article 81 of the EC Treaty
and the UK's Competition Act.
The OFT believes that, like the MasterCard MIF agreement, the
Visa MIF agreement leads to an unduly high fee being paid to card
issuing banks by merchant acquirers on every Visa transaction.
The parties now have an opportunity to make written and oral
representations to the OFT.
