(CN) - An offer by Visa Europe to end an antitrust probe in the EU by cutting interbank fees is now legally binding on the credit card giant, the European Commission said Wednesday.
The concessions come after the commission announced this past summer that it would pursue caps on interbank fees in the wake of long-running competition investigations of both Visa and Mastercard. If approved by EU lawmakers, the plan will cap the fees to just 0.2 percent of transaction value for debit cards and 0.3 percent for credit cards.
Visa's offer to cut its fees to the 0.3 percent level represents a reduction of 40 to 60 percent, regulators said. Additionally, the company agreed to improve transparency when it comes to how it invoices the fees, which are typically passed on to merchants - and ultimately consumers - by banks.
"The cap on interbank fees for Visa Europe's credit cards and the commitments ensuring cross-border competition are excellent news for European consumers, since the fees paid by retailers end up on their bills," said Joaquin Almunia, the commission vice president in charge of competition. "Today's decision adds to what has already been achieved through the commission's antitrust investigations concerning interbank fees."
Regulators noted that Visa Europe's concessions had no impact on an investigation into parent company Visa, Inc.'s practice of charging exorbitant interbank fees for international users who use their cards while traveling within the EU. Those prices are set by Visa, Inc. and not Visa Europe, the commission said.