Friday, May, 24, 2024 07:27:38

Reports confirm that the European Union has slapped MasterCard Inc. with a fine of EUR 570.6 million (US$648 million) for imposing rules which the regulators believe may have elevated the costs of card payments artificially in the region.

The European Commission said in a statement that MasterCard had prevented retailers from seeking lower rates from banks that are outside the EU country where they are based. The curbs of MasterCard on cross-border acquiring seemingly ended when the credit card legislation was introduced by EU in 2015. Allegedly, the probe of EU had commenced in 2013 and escalated two years later with a statement of objections.

Further from the reports, MasterCard had set aside $650 million for covering the fine last month, lower in comparison to the potential EUR 1 billion the company flagged as a possibility in 2017. Regulators stated that the company has received a 10 percent reduction in fine for cooperating with the EU. In December, Mastercard had said it expects to book the charge in its results of the fourth quarter.

Sources familiar with the matter mentioned that the EU antitrust enforcement has been targeting credit card payments for nearly two decades. Visa Inc. and MasterCard Inc. are separately looking to settle one more EU probe into fees charged for tourists who are shopping in Europe, which could purportedly help them in avoiding fines, sources further said.

MasterCard had also been sued by retailers that are looking for compensation after an EU investigation in the past found out that their fees for cross-border payment restricted competition in an unfair manner. MasterCard stated that the decision from EU has ended a legacy investigation into only historic practices which were in place for a little less than two tears. The company further insisted that it would not require any modification in the current business practices of MasterCard.