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The office of European Union Competition Commissioner Neelie Kroes is reviewing a merchant group's claims that some acquirers have failed to pass on savings from MasterCard Worldwide's suspension of cross-border interchange in June, a commission spokesperson tells CardLine Global sister publication Cards&Payments. Acquirers pay card issuers interchange and pass the expense on to their retailer customers. MasterCard on 21 June suspended assessing interchange on cross-border transactions for all MasterCard and Maestro-branded consumer cards in Europe. The move complied with a ruling from Kroes' office six months earlier. That ruling, which MasterCard is appealing, declared the card company's interchange-rate policy illegal. "We are currently assessing whether these new developments raise questions of compliance with the decision," the commission spokesperson tells Cards&Payments. Xavier Durieu, administrator of EuroCommerce, a Brussels-based merchant-lobbying group, contends that after MasterCard suspended assessing cross-border interchange, acquiring banks did not voluntarily go to merchants to offer fee reductions. "Worse than that, when [merchants] question their acquirers to renegotiate the price, in many cases the answer is 'no,'" he says. Jan Molema, an Ikea group payment card manager for large furniture retailer Ikea based in Belgium, earlier told Cards&Payments only a few of the 20 acquirers Ikea deals with in Europe have refunded or withdrawn the merchant fees they charge on cross-border transactions, even after the chain insisted on it (CardLine Global, 30 Sept.). Durieu says some of the acquirers have said they would refund the money only if MasterCard loses its appeal. Cross-border transactions make up only about 3% of total card transactions in Europe. Germany-based consulting firm PaySys estimates acquirers there could collect 27 million euros (US$36.9 million) per year if they do not pass on the interchange savings to merchants. By not collecting the interchange, issuers in Germany are losing 55 million euros per year in revenue, says Malte Krueger, who works for PaySys. Krueger says one German acquirer told him it was negotiating fee cuts only for those retailers whose cross-border transaction volume is "significant." MasterCard previously has declined comment on the EuroCommerce complaints. A spokesperson was not available Thursday to respond to the competition commissioner's review, which is not a formal investigation.
