|Author (Person)||Frost, Laurence|
|Series Title||European Voice|
|Series Details||Vol.8, No.23, 13.6.02, p16|
EUROPEAN retailers have vowed to appeal to the European Court of First Instance against an expected Commission decision approving Visa's system of credit card transaction charges.
The retailers' organisation EuroCommerce promised a legal challenge if the Commission drops its investigation into Visa's fees, which it believes break EU competition laws.
'If we're the losing party we'll be in appeal the next day,' said EuroCommerce Secretary-General Xavier Durieu.
The organisation's members have been campaigning to persuade the regulator - and the public - that shops and their customers are unfairly penalised by the 'multilateral interchange fee' (MIF) paid by the retailer to the card issuing bank on cross-border transactions.
The retailers say competition is restricted by Visa's rules preventing rival 'acquirers' - banks processing the transactions - from undercutting each other on the MIF, which makes up around 80 of the total transaction charge.
But according to Commission insiders, a draft decision already in circulation would see the five-year-old probe ended in exchange for pledges from Visa to reduce its charges by 20 over five years.
The imminent decision has prompted a war of words between the two sides, with the retailers accusing Visa of 'ripping off' consumers (European Voice, 16 May).
But Visa's European president, Hans van der Velde, said existing 'cash-back' schemes allowing supermarket shoppers to withdraw money against their card balances proved that plastic transactions were often cheaper than handling cash.
'Cash-back reduces retailers' cash handling substantially - they have empty tills and less transport and security problems,' said van der Velde. 'To suggest Visa is bad for consumers is absolute hypocrisy, and I'm grateful the Commission has come to the same conclusion.'
Retailers insist Visa payments cost more than cash transactions, and want the freedom to opt out of some obligatory services - such as Visa's payment guarantees and one-month free credit for card holders - which they believe they could buy more cheaply in a competitive market.
The Commission is expected to announce its decision on Visa in the next few months. The Court of First Instance could take years to rule on an appeal by EuroCommerce.
European retailers have vowed to appeal to the European Court of First Instance against an expected European Commission decision approving Visa's system of credit card transaction charges.
|Subject Categories||Business and Industry, Internal Markets|