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Beyond the Transaction: Every Transaction Has a Story

Seven Years is a Long Time in the Payments Industry

This week the European Court of Justice in Luxembourg will make its final judgment in a long running court case on our cross-border interchange fees within Europe. Although it will undoubtedly make the news, what will the ruling actually mean in practice?

A lot has happened since this process began with a European Commission anti-trust decision on cross-border interchange fees seven years ago.  Back in 2007, for most of us twitter was still just the noise a bird makes and tablets were something you bought in a pharmacy.

MasterCard was also quite a different company. We had only recently listed  as a public company on the New York stock exchange. This meant that, unlike Visa Europe, we were no longer run as an association of banks – something that was perhaps not fully taken on board in the European Commission’s original investigation.

At the same time, contactless was only in its infancy and mobile payments belonged to a very distant future. Both are now at the heart of our business.

Of course, we wo44632383uld be disappointed if the Court of Justice decides against MasterCard in its ruling this week. However, in practice, a negative judgment would have little or no impact on how MasterCard operates today.

If the Court upholds the Commission’s 2007 decision, we will continue to comply with the decision as we have been doing for a number of years.  This means we would maintain our European (intra-EAA) cross-border consumer interchange fees at a weighted average of 0.2% for debit and 0.3% for credit.

The reason why we challenged the Commission’s decision in the first place was our strong belief that market-based solutions are the best way to ensure a fair and competitive payments landscape in Europe – one that makes consumers’ lives easier, and brings increased business for merchants.

Together with our partners, we will continue our constructive cooperation and dialogue with EU decision-makers to ensure that any future payments legislation allows us to provide the most innovative and affordable payment solutions to our customers, cardholders and retailers, and does not have the unintended consequence of shifting costs on to consumers – as has happened where interchange has been regulated in the past.

I am also very keen to strengthen our relationships with retailers and explore new and exciting ways of working together. The World Retail Congress later this month is the ideal place to re-launch this effort to ensure that we all – consumers, businesses, governments and payment providers – benefit from electronic payments.