The Fair Payment Alliance is celebrating this week following the European Court of Justice’s dismissal of MasterCard’s final appeal against the Commission’s 2007 decision banning cross-border fees.

 

MasterCard’s Multilateral Interchange Fee (MIF), was originally found in breach of EU anti-trust rules in 2007. This led to the European Commission reducing MasterCard’s MIF to 0%, effectively a prohibition.

 

The card company subsequently appealed to the ECJ on both technical and legal grounds but it was rejected in May 2012. In a last ditch attempt to save the fee system, MasterCard exercised a final appeal on purely legal grounds, claiming the Commission’s 2007 decision did not lawfully apply because MasterCard had launched an IPO (initial public offering).

 

Despite powerful banking and finance supporters, the ECJ dismissed MasterCard’s final appeal on all counts at the end of last week.

 

FAIRER FEES FOR TRAVEL RETAILERS

The FPA describes it as a ground breaking decision and a “key moment for the FPA’s campaign for fairer fees for travel retailers and their customers”.

 

The court’s final judgement should now remove any doubts surrounding MasterCard’s MIF. It also significantly increases the political pressure on EU finance ministers – who are currently considering the European Parliament’s proposed Payment’s Package text to cap MIF rates across the board. It also lays the groundwork for national competition authorities that have national cases pending to take action ahead of any regulation.

 

Welcoming last week’s judgement, FPA leader and Kappé International Chairman, Jacques Parson (left), who also chairs the Dutch Retail Association’s Payment Systems Committee, says: “This is very good for all of us in travel retail. It is a tremendous success and sets the situation in stone now and I thank those in our network that have helped.

 

“It is the result of a lot of hard work by us and our allies, such as EuroCommerce, which launched the complaint many years ago. It absolutely vindicates all we have said about interchange fees and lays a key foundation stone in our campaign for a fairer regulatory framework with the card companies and banks.

 

The FPA believes that enthusiasts of an unrestricted interchange fee model will now find it very difficult to garner support.