(Bloomberg)—Visa Inc. and MasterCard Inc. ended nearly two decades of European Union antitrust scrutiny with a pact that requires them to reduce fees for foreigners shopping in the region.
The EU dropped its final investigations months after fining MasterCard 570.6 million euros ($636 million) in another probe over payment rules. Monday’s settlement, which rubber-stamps a draft accord from December, sees the duo reduce levies for non-European card-holders charged on purchases in the 28-nation bloc.
“This, together with our January 2019 decision on MasterCard’s cross-border card payment services, will lead to lower prices for European retailers to do business, ultimately to the benefit of all consumers,” Margrethe Vestager, the EU’s competition commissioner, said in a statement.
Under the pact, debit card fees will fall to 0.2%o f a transaction and credit card fees will be cut to 0.3%, the same for European cards. MasterCard said it will apply the new rates from Oct. 19.
The fee reductions must be introduced within six months and will last for 5 1/2 years. The companies can be fined if they breach the pledge. For online transactions, where there’s a higher risk of fraud, the fees will be 1.15% for debit cards and 1.5% for credit cards.
The move to limit such interchange rates would most affect foreign banks such as JPMorgan Chase & Co. and Citigroup Inc., which have large credit-card portfolios in the U.S. with cardholders who shop around the world.
“MasterCard sees the closure of this antitrust chapter as an important milestone,” the company said in an emailed statement. Visa said in a separate statement it “played a central role negotiating a resolution that achieves the best outcome” for both firms.