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MasterCard Europe Reaches Interim Arrangement with European Commission on Cross-Border Interchange Fees


Appeal of the Commission’s December 2007 Decision to Continue
Waterloo, Belgium and Purchase, NY.- MasterCard Europe said today that it had reached an understanding with the European Commission on interim interchange fees for cross-border consumer payments within the European Economic Area (EEA). New interchange fees will be set for these transactions while the company pursues its appeal of the Commission’s December 2007 decision regarding interchange. MasterCard Europe had temporarily reduced these fees to zero in June 2008 in order to ensure its conformity with the decision.

In announcing the interim fees, Javier Perez, president, MasterCard Europe, said:

“MasterCard Europe welcomes the Commission’s recognition of the legitimacy of interchange fees in open four-party payment systems. We expect this will provide a degree of clarity for our customers, thereby facilitating progress towards the implementation of the Single Euro Payments Area.

“However, we do not believe this level of interchange is adequate to sustain strong competition in the European payments industry or to encourage the investment and innovation that will be required to provide European consumers and merchants with better payment products in the future. That is why these rates are only interim, and why we are pursuing our appeal in the European Court of First Instance of the European Commission’s December 2007 decision. We believe we have strong arguments that the decision should be reversed.

“We also believe these interim interchange fees significantly undervalue the benefits merchants receive from accepting payment cards, such as a payment guarantee and higher sales than with cash. Experience has demonstrated that when interchange fees are artificially lowered without reflecting the benefits of payment cards for all participants in the system, the result is higher costs and reduced benefits for cardholders.

“We remain committed to providing payment systems that benefit the millions of European cardholders and merchants who rely on MasterCard and Maestro cards, and to providing our customers with competitive and best-in-class payments products and services.”

New Rates and Rules

Effective 1 July 2009 MasterCard Europe will establish intra-EEA cross-border default interchange rates for consumer card transactions that, on average, will not exceed 30 basis points for credit cards and 20 basis points for debit cards. These interim rates will apply only to cross-border transactions, which account for less than five percent of MasterCard Europe’s total volume.

On 1 July 2009 MasterCard Europe also will publish on its website the new interchange rates and the rates that MasterCard Europe itself establishes in the EEA, both for crossborder and domestic transactions. MasterCard Europe acquirers will be required to inform merchants of the availability of these interchange fees and of the MasterCard and Maestro Merchant Rules on MasterCard’s website. MasterCard Europe acquirers will also be required to inform merchants about the Company’s existing rules and practices concerning surcharging and a new rule providing specifically for merchants’ freedom to use multiple acquirers to process their MasterCard consumer, MasterCard commercial and Maestro transactions.

In addition, MasterCard Europe announced a new rule for its acquirers that will provide merchants with specific information about the cost of accepting MasterCard consumer, MasterCard commercial and Maestro cards.

MasterCard expects that all four-party systems will be held to the same standard so that there will be a level playing field in the European payments industry.

Finally, MasterCard Europe announced today that effective 1 July 2009 it will withdraw in the EEA the acquirer fee increases and new fees implemented last October.

MasterCard does not anticipate that the actions announced today will have any significant near-term financial impact on the company.


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