European retailers are rallying against Visa and Mastercard, formally petitioning the European Commission on May 14, to rein in what they call an “opaque system” of payment fees.
A coalition of merchants, including EuroCommerce, Ecommerce Europe and the European Digital Payment Industry Alliance claims card scheme fees have ballooned by nearly 34% – according to findings from The Brattle Group – over five years without corresponding service improvements.
“For too long, businesses have been trapped in an opaque system with a lack of choice or competition,” says Francesco Simoneschi, CEO of TrueLayer, echoing growing merchant frustration across the continent.
According to reports, the coalition has urged the Commission to enforce EU antitrust laws against Visa and Mastercard, revise interchange fee regulations by implementing price caps, impose transparency and non-discrimination requirements on ICS, as well as establish a regulatory tool to monitor and review their activities.
“ICS have been able to increase their fees without competitive challenge or regulatory scrutiny. They have also rendered their system of fees and rules so complex and opaque that players are unable to understand, let alone challenge, what they are paying for and why,” read a section of the letter seen by Reuters.
Simoneschi noted card schemes have turned complexity into a business model, layering fees on top of fees in a way that is impossible to navigate, let alone challenge. “This leaves merchants with an impossible decision: absorb the rising costs or pass them on to their customers,” he said.
“The steady increase in fees (nearly 34% in just four years) without a corresponding improvement in service is a clear indicator of the harm caused by a duopoly.”
The start of the end for Visa and Mastercard’s duopoly?
Industry stakeholders have expressed concerns about the two payment giants’ fees in the past, with Mastercard agreeing to a £200m settlement over unlawful interchange fees in February.
The UK’s financial watchdog has increasingly scrutinised Visa and Mastercard in recent years, arguing that their dominance in the payments sector is stifling competition and slowing economic growth.
According to the Payment Systems Regulator (PSR), the two firms increased their core scheme and processing fees by over 25% between 2017 and 2023, adding more than £170m in annual costs for UK businesses. In response, the regulator has proposed new measures to boost transparency around these charges.
Despite mounting pressure across Europe’s payments landscape, both Visa and Mastercard deny any wrongdoing.
A Visa spokesperson even went so far as to defend the fees, stating they reflect the value of services provided.
“[The fees reflect] the extremely high levels of security and fraud prevention, near-perfect operational resilience and reliability, and a wide range of consumer protections and high-quality, innovative products and services that serve consumer and merchant needs,” the spokesperson said.
Still, calls for change are growing louder.
“We believe payments should be fair, simple, transparent, and competitive,” said Simoneschi. “That’s why we support merchants’ call for the Commission to level the playing field, and why we continue building a fairer and more secure alternative for merchants and consumers alike.”
