Visa Europe Ltd., the regional franchise of Visa Inc., expects to reach an agreement this year with European Union regulators to resolve a dispute over a credit card fee.

Visa Europe Chief Executive Peter Ayliffe said Tuesday that he was close to an accord with the European Commission, which began a probe last March into the company's interchange fees. These are paid between banks on each transaction, and ultimately passed on to retailers and cardholders.

"We will get there as soon as possible because we believe that it's in the market's interest," Mr. Ayliffe said in Brussels. "We both agree that we need a long-term solution."

EU Competition Commissioner Neelie Kroes has likened the fee to a tax driving up prices for all consumers. Merchants argue that interchange fees inflate prices for shoppers by as much as $17.5 billion a year, according to the European Retail Round Table, a lobby group for 14 retailers, including Carrefour SA, Europe's biggest retailer, and Tesco PLC, the U.K.'s largest retailer.

Ms. Kroes has said the fee increases retailers' costs for accepting card payments without leading to any advantage for consumers. The fee should be used to improve security and to prevent fraud, not just to benefit banks' revenues, she said.

In December 2007 the European Commission ordered MasterCard Inc. to revise how it sets interchange. Six months later MasterCard suspended the fee to avoid antitrust fines while continuing negotiations with the commission on how to revise the charge.

The commission said last month that it was seeking a consultant to conduct an analysis of the costs and benefits of different payment methods for merchants.

Mr. Ayliffe said talks with the commission were focusing on which "business model" will be used for card payments rather than on a precise figure for fees. The commission has objected to card companies' practice of using the fees to pay for incentive programs, such as travel or hotel plans.

Visa Europe is owned by the banks that issue the cards. It split in 2007 from the company that went public as Visa Inc.

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