Author: Yun Chee

BRUSSELS (Reuters) - Europe's largest retailer and online retailer has urged the European Commission to control the high fees alleged by Visa and MasterCard, saying they have hurt the group's competitiveness and obstacles to competitors.

Visa and MasterCard dominate the payment card market, and in recent years, retailers have faced complaints about their fees, which retailers say is lack of transparency. Two U.S. companies process about two thirds of card payments in the euro zone.

Retailers’ dissatisfaction has prompted the European Union in 27 countries to explore alternatives such as digital euros to reduce reliance on U.S. payment providers. However, the slow legislative process on digital currencies has frustrated some policy makers and businesses.

"The International Card Program (ICS) has been able to increase fees without competitive challenges or regulatory scrutiny. They have also made their fees and rules so complex and opaque that players cannot understand, let alone challenges, what they pay for and why they pay for," the retailer said in a May 13 letter.

ICS is a term for payment card networks.

The team cites Brattle Group's 2024 report, which shows that ICS expenses increased by 33.9% between 2018 and 2022 - an average of 7.6% per year - above inflation, but no corresponding improvements were found to be made to EU businessmen and consumers' services.

Visa said its fees reflect the value of its services to European financial institutions, merchants and consumers.

"This includes extremely high security and fraud prevention, almost perfect operational resilience and reliability, as well as a variety of consumer protections and high-quality, innovative products and services that meet the needs of consumers and merchants," a Visa spokesperson said.

Mastercard did not respond to a request for comment.

The letter was sent to Teresa Ribera, the commissioner’s antitrust director, Maria Luís Albuquerque, financial services commissioner and Valdis Dombrovskis, economic director.

Signatories are European Business, European E-commerce, Independent Retail Europe, European Association of Companies Treasurers and European Digital Payment Industry Alliance.

Members of the lobby group include Aldi, Amazon, Carrefour, Ebay, H&M, Ikea, Intersport, Marks & Spencer, Worldline, Nexi and Teya.

The letter calls on the Commission to take action on visas and Mastercards in accordance with EU antitrust rules, to modify the rules on exchange fees by implementing price controls on ICS fees, transparency and non-discriminatory obligations, tax transparency and non-discriminatory obligations, and to introduce tools for regulatory agencies to act on ICSS.

(Reported by Foo Yun Chee in Brussels; Editors by Nia Williams and Rod Nickel)