Just five months after declaring that Mastercard?s Interchange fees were acting outside of competition law, the UK?s Office of Fair Trading has launched a new investigation into the credit card company?s modified Interchange Fee system.

This latest investigation is revealed in a statement released by the Fair Payment Alliance (FPA) which is fighting these charges. It says: ‘Essentially, after the OFT?s report, published last September, MasterCard revised their MIF system but they kept in the term extraneous costs, which the OFT do not believe should be part of the fixed rate and is a key area campaigners have been arguing against.’
The statement says that these fees, which retailers in Europe have been campaigning against are simply passed on to retailers by the banks and are both ‘unfair and unreasonable to travel retailers’ and the travelling consumer and the national and international authorities. It also believes that politicians are beginning to see the merits of FPA?s arguments.
Jacques Parson, who is leading the travel retail FPA said: ‘I think this new investigation shows there is a growing awareness by national authorities that the card companies have acted unfairly to us and our customers. I am pleased to see that the OFT have acted firmly in this respect. But MasterCard?s appeal in the UK suggests the card companies are going to fight hard to retain their non-transparent fees system.
‘Retailers should be ready and willing to continue supporting the FPA by helping us build common sense arguments to ensure we are successful in our goal of winning a fairer system for travel retailers and the travelling consumer.’
As a result of the OFT?s original investigation, MasterCard and its supporting Banks, which form the MasterCard UK Members Forum (MMF), revised their MIF arrangements in an attempt to avert OFT action. But this revision retained the notion of the 'extraneous costs' ? i.e. costs that are not directly related to the necessary operation of the masterCard scheme. It is for this reason that the OFT have launched an immediate secondary investigation.
Alongside this new investigation, the OFT is continuing to investigate Visa. In 2002, the European Commission concluded that Visa?s MIF was unlawful and only allowed the continuation of Visa?s MIF after changes were made to the method of determining costs.
Meanwhile, MasterCard has launched an appeal against the OFT?s September decision last year.