Retailers could benefit from lower credit card charges after the Office of Fair Trading published a preliminary conclusion stating MasterCard's transaction fees were anti-competitive.
The OFT investigated the fees after a complaint from the British Retail Consortium in September 2000. It concluded MasterCard's multilateral interchange fee (MIF), the fee between the card issuer and a retailer's bank, infringed the Competition Act. It said the charge was passed on to retailers by the banks and acted like a tax on retail transactions, resulting in higher prices for consumers.
The OFT said it would enforce the Competition Act in the spring if MasterCard could not show its existing MIF agreements complied with the Act or if if did not change its current practice.
BRC deputy director general Mark Bradshaw said: "The OFT got it right by identifying the MIF as a tax on retail transactions paid for by consumers. The OFT must press for a more flexible and transparent credit card market."
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The OFT investigated the fees after a complaint from the British Retail Consortium in September 2000. It concluded MasterCard's multilateral interchange fee (MIF), the fee between the card issuer and a retailer's bank, infringed the Competition Act. It said the charge was passed on to retailers by the banks and acted like a tax on retail transactions, resulting in higher prices for consumers.
The OFT said it would enforce the Competition Act in the spring if MasterCard could not show its existing MIF agreements complied with the Act or if if did not change its current practice.
BRC deputy director general Mark Bradshaw said: "The OFT got it right by identifying the MIF as a tax on retail transactions paid for by consumers. The OFT must press for a more flexible and transparent credit card market."
{{NEWS }}
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