The president of Mastercard in Europe has spoken out in support of the fees the company charges merchants, as both Mastercard and Visa are being investigated by regulators in the UK and facing opposition from retailers. Additionally, Big Tech companies are making attempts to enter the payment industry, reported The Financial Times.
“We believe interchange [fees paid to banks for payments on their network] is the right mechanism for everybody, sharing the costs and benefits of the payment system,” Mark Barnett, Mastercard’s president for Europe, told the Financial Times. “We think it represents incredibly good value.”
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The Payment Systems Regulator in the UK is currently examining the cross-border interchange fees charged by card networks on behalf of banks for each card payment made through their network. In 2021, Mastercard and Visa make up 99% of these payments in the UK. The EU implemented a regulation in 2015 which sets a limit of 0.2% of the transaction value for debit cards and 0.3% for credit cards on interchange fees.
After the Brexit transition period, both networks increased their interchange fees for online transactions between the EU and the UK to 1.15% for debit cards and 1.5% for credit cards, citing fraud and increased competition.
“We think they represent incredibly good value,” said Barnett, adding that the caps put in place in Europe in 2015 had helped to double the number of merchants who accepted Mastercard to 100mn over the past eight years by lowering the costs.
