Watchdog charges MasterCard with restricting competition
(7 September 2005 – UK) A stoush is brewing between MasterCard and the UK’s Office of Fair Trading (OFT) over interchange fees.
OFT said a collective agreement between the MasterCard UK Members Forum which set the interchange fees on purchases made between March 2000 and November 2004 was anti-competitive.
The watchdog said the "unduly high" interchange fees were like a tax on UK consumers.
"The parties to this collective agreement set the interchange fee to derive revenues from retailers and their customers over and above the costs of providing the payment services," the OFT said.
MasterCard is set to appeal against the ruling, saying OFT’s claim that consumers were disadvantaged was "simply wrong".
"Consumers benefit from greater choice as more retailers accept credit cards and retailers of all sizes benefit as card usage expands," the company said.
The OFT is also looking into interchange fees charged by Visa members.
The watchdog said the "unduly high" interchange fees were like a tax on UK consumers.
"The parties to this collective agreement set the interchange fee to derive revenues from retailers and their customers over and above the costs of providing the payment services," the OFT said.
MasterCard is set to appeal against the ruling, saying OFT’s claim that consumers were disadvantaged was "simply wrong".
"Consumers benefit from greater choice as more retailers accept credit cards and retailers of all sizes benefit as card usage expands," the company said.
The OFT is also looking into interchange fees charged by Visa members.
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