Europe's largest retailers have banded together to press the European Commission to crack down on fees charged by Visa and Mastercard.
"International Card Schemes (ICS) have been able to increase their fees without competitive challenge or regulatory scrutiny. They have also rendered their system of fees and rules so complex and opaque that players are unable to understand, let alone challenge, what they are paying for and why," the retailers said in a letter dated May 13 and seen by Reuters.
The group, comprising EuroCommerce, Ecommerce Europe, Independent Retail Europe, the European Association of Corporate Treasurers and the European Digital Payments Industry Alliance, cited a 2024 report by The Brattle Group that showed a cumulative increase in ICS' fees of 33.9% between 2018 and 2022 - averaging 7.6% per year - on top of inflation, but did not find any corresponding improvement in service for EU merchants and consumers.
Overall, Visa and Mastercard are estimated to process about two-thirds of card payments in the Euro zone. Their dominance of the market has led to growing concerns among policy makers of over-reliance on foreign networks for payments. This has led the ECB to encourage home-grown European alternatives like the European Payments Initiative and its Wero wallet and spurred the development of the digital euro project.
Frustrated by the slow progress in developing alternatives, the retail lobby groups have called on the Commission to take action against Visa and Mastercard under EU antitrust rules, modify the rules on interchange fees by imposing price controls on fees, levy transparency and non-discriminatory obligations on ICSs and introduce a tool for regulators to scrutinise actions taken by the ICSs.
The call for action is backed by TrueLayer's CEO Francesco Simoneschi. He says: “The issues raised by Europe’s leading retailers reflect the daily reality we hear from merchants across Europe. For too long, businesses have been trapped in an opaque system with a lack of choice or competition. The card schemes have turned complexity into a business model, layering fees on top of fees in a way that is impossible to navigate, let alone challenge. This leaves merchants with an impossible decision: absorb the rising costs or pass them on to their customers.
In response, Visa says its fees reflect an abundance of initiatives to improve security, ensure operational resilience and the ongoing development of innovative products for both consumers and merchantts.