Credit Card companies could be hit by the EU

30/01/2007

A report could be delivered this by European Union regulators that may not be good news for some credit card companies. The regulators will threaten to levy fines to bank and credit card companies that are blocking competition.

There are talks that the regulator will look into banks and credit card providers for using tactics to keep competitors out of the market including collusive tactics for prices.

Companies can actually be fined on their worldwide sales for antitrust violations and this can be as much as 10 per cent.

Credit Card companies Visa International and MasterCard have already been challenged by the regulator on the issue of transaction fees. The focus of the discussions is primarily on the fees that are paid across banks, known as the interchange.

These fees are not collected by the card provider but are the fees paid by banks when a credit card customer pays using their card. All the card providers are doing is assisting with the banks on the charges they could be setting.