Following a massive settlement between payment processors and retailers in the United States, the European Union sent new objections to Visa about its policies and interchange fees. The EU asserts that Visa's operations are anti-competitive, and the high price of interchange fees discourages competition while causing increased prices for consumers.
Retailers in the United States put up a similar defense. Because of the high cost of credit card processing, businesses have to charge more for goods sold to consumers. Retailers say that lower fees would allow the retail industry to pass on savings to customers due to lower operational costs from payment processing networks.
The EU complaint will operate differently than the settlement in the United States. By the way the courts and regulators work, the EU will submit its complaints to Visa for interchange fees. Visa can then review its policies and make appropriate changes – such as lowering its interchange fees charged to process payments – or it can continue to negotiate with regulators, potentially risking a fine if Visa doesn’t act in the way that regulators would like to see.
In 2009, the European Union brought charges against Visa for failing to act on its debit card fees. The same week, MasterCard lowered its fees to avoid an anti-trust suit with the EU. It appears that now, three years later, the EU will take a firm stance with payment processors on the issue of credit card fees, which have always enjoyed fewer regulations because the networks are proprietary. Debit cards, however, are processed by the banking system on networks that are publicly-funded.