MasterCard to drop ‘illegal’ fees
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- June
- 13
MasterCard Inc., the giant credit card company based in Purchase, said this week it will drop 40-year-old transaction fees that European regulators have declared illegal.
The European Commission said last December the company had to devise an alternative to its interchange fees that doesn’t harm consumers. The commission said MasterCard would face a daily penalty of up to 3.5 percent of sales if it did not revise the interchange fees.
The interchange fees are paid from bank to bank on each cross-border payment transaction. The fees cost consumers as much as 13.5 billion euros (about $21 billion) a year, according to the European Retail Round Table, a lobby group for 14 retailers.
MasterCard said it would drop the fees as of June 21, but will continue discussions with the commission about a better way to structure the fees.
The company is also appealing the commission’s decision to the European Court of First Instance.
This entry was posted
on Friday, June 13th, 2008 at 2:53 pm by Allan Drury.
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