Britain’s OFT Says Visa’s Interchange Pricing Is Anti-Competitive

The United Kingdom's Office of Fair Trading today said interchange fees paid by Visa acquirers to Visa issuers in the U.K. are anti-competitive, an action that could lead to regulatory action against the fee structure. In what it calls a “statement of objections,” the OFT said Visa's interchange structure, formally known as the multilateral interchange fee, is “unduly high,” and that this fee ultimately affect retailers and consumers. The British watchdog agency also said the fee violates Article 81 of the European Community Treaty and the Chapter 1 prohibition of the Competition Act of 1988, both of which ban anti-competitive agreements. Visa and its members, which include banks in Visa U.K. Visa Europe, and Visa International that issue cards or acquire transactions in the U.K., may now reply to the OFT, which says it will take these arguments into account before deciding whether to take action against the bank card network and its members. The statement, which comes at a time when controversy surrounding interchange pricing is at an all-time high in the U.S., was not unexpected. It follows a years-long OFT investigation of bank card interchange fees that resulted in a similar finding last month against MasterCard (Digital Transactions News, Sept. 6).