Deliver Your News to the World

‘Don’t Try To Fix What Isn’t Broken’ Declares MasterCard Europe President


MasterCard has its day in court with the European Commission and sets out what is at stake for European payments

Waterloo, Belgium, 8 July 2011, The General Court of the European Union held a hearing today on MasterCard’s appeal against the European Commission’s 2007 decision on the company’s cross-border consumer interchange fees in the EEA.

“What is at stake in this case is the future direction of European payments — whether or not consumers and businesses will have more or fewer choices in how they want to pay, and whether payment methods in the EU will remain world class,” said MasterCard Europe president Javier Perez. “We’re asking: Why is the Commission trying to fix what isn’t broken? The market is moving fast and in ways that no one — including regulators — can easily predict. We’re concerned that government intervention threatens the continued development of payments in the EU, and that European consumers and merchants will end up missing out on having more convenient, more secure and more advanced payment options that will make consumers’ lives easier and retailers’ businesses more profitable.”

Perez pointed out that since the Commission first began examining interchange fees in 2000, a lot has changed in the payments industry. Increased competition and innovations such as contactless, mobile, and e-commerce payments are being driven by retailers, banks, telecommunications companies, technology companies, and other new players as well as by MasterCard, resulting in major technological advances, significant growth in electronic payment transactions and the acceptance of different kinds of payments across Europe. “We welcome these new developments and are competing harder than ever before in this rapidly changing environment,” says Perez.

“The real advantage of an open payment system like MasterCard’s is that more competition is introduced throughout the value chain. MasterCard’s global network allows thousands of banks to provide advanced payment services to hundreds of millions of consumers and millions of retailers around the world. Interchange is the most transparent and efficient way to achieve the right balance among all participants in the system. That’s what today’s hearing and this case are really about.”

“We’re pleased that we had our day in court and we look forward to the end of this dispute so that we can focus all of our attention on creating an advanced, well-functioning internal market for payments in Europe and to realizing the full potential of SEPA for consumers and businesses throughout the region. Our main goal remains the same: replacing cash with electronic payments for the benefit of European consumers, retailers, governments and society as a whole.”

Note to Editors

On March 3, 2008 MasterCard Europe applied to the European General Court in Luxembourg to annul the European Commission’s decision on MasterCard Europe’s cross-border consumer interchange fees. The December 19, 2007 decision required the company, among other things, to repeal its intra-EEA fallback interchange fees.

On April 1, 2009 the company announced it had reached an interim arrangement with the European Commission regarding its cross border consumer interchange fees. While MasterCard was pleased that the Commission recognised the legitimacy of interchange fees in open four-party payment systems, the company considers the levels of interchange too low and therefore continued the appeal against the Commission decision, and believes it has strong arguments that the decision should be reversed.

In its appeal, MasterCard’s concerns with the decision focus on:

the Commission’s failure to recognize that four-party payment systems cannot operate without default settlement terms between banks that issue cards to consumers and those that acquire transactions for merchants, which requires the setting of an interchange fee;
the Commission’s refusal to recognize the efficiencies that four-party payment systems create and the fairness of MasterCard’s interchange fees; and
the Commission’s inaccurate conclusion that, despite MasterCard’s May 2006 IPO, MasterCard and its customers continue to be “an association of undertakings”, and its mischaracterization of MasterCard’s interchange fees as decisions of an association that restrict competition under EC Treaty rules.

For more information on the European Commission decision and MasterCard’s response, visit the MasterCard website at

About MasterCard Worldwide

As a leading global payments company, MasterCard Worldwide prides itself on being at the heart of commerce, helping to make life easier and more efficient for everyone, everywhere. MasterCard serves as a franchisor, processor and advisor to the payments industry, and makes commerce happen by providing a critical economic link among financial institutions, governments, businesses, merchants, and cardholders worldwide. In 2010, $2.7 trillion in gross dollar volume was generated on its products by consumers around the world. Powered by the MasterCard Worldwide Network – the fastest payment processing network in the world – MasterCard processes over 23 billion transactions each year and has the capacity to handle 160 million transactions per hour, with an average network response time of 130 milliseconds and with 99.99 percent reliability. MasterCard advances global commerce through its family of brands, including MasterCard®, Maestro®, and Cirrus®; its suite of core products such as credit, debit, and prepaid; and its innovative platforms and functionalities, such as MasterCard PayPass™ and MasterCard inControl®. MasterCard serves consumers, governments, and businesses in more than 210 countries and territories. For more information, please visit us at Follow us on Twitter: @mastercardnews.

Forward-Looking Statements

Statements in this press release which are not historical facts, including statements about MasterCard’s plans, strategies, beliefs and expectations, are forward-looking and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made. Accordingly, except for the company’s ongoing obligations under the U.S. federal securities laws, the company does not intend to update or otherwise revise the forward-looking information to reflect actual results of operations, changes in financial condition, changes in estimates, expectations or assumptions, changes in general economic or industry conditions or other circumstances arising and/or existing since the preparation of this press release or to reflect the occurrence of any unanticipated events. Such forward-looking statements include, without limitation, statements related to our creating an advanced, well-functioning internal market for payments in Europe, realizing the full potential of SEPA for consumers and businesses throughout the region and replacing cash with electronic payments.

Actual results may differ materially from such forward-looking statements for a number of reasons, including those set forth in the company’s filings with the Securities and Exchange Commission (SEC), including the company’s Annual Report on Form 10-K for the year ended December 31, 2010, the company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that have been filed with the SEC during 2011, as well as reasons including difficulties, delays or the inability of the company to achieve its strategic initiatives set forth above. Factors other than those listed above could also cause the company’s results to differ materially from expected results.


This news content was configured by WebWire editorial staff. Linking is permitted.

News Release Distribution and Press Release Distribution Services Provided by WebWire.