In a statement, Visa’s European division has announced that it welcomes the Commission’s proposal to end proceedings on its immediate debit interchange fees.
Under the proposed commitments, Visa Europe will cap its weighted average intra-regional MIF for immediate debit transactions at 20 basis points (0.2 percent) for four years. The same cap will apply to domestic immediate debit rates that defaulted to the intra-regional MIF rate before 10 March 2009 and continue to do so, and to domestic immediate debit rates set directly by Visa Europe.
The commitment to a cap to Visa Europe’s immediate debit MIF is calculated under the so-called “merchant indifference” test, developed in recent economic literature. In particular, the Commission has calculated the EEA wide immediate debit cap by averaging the results of two central bank studies conducted in the Netherlands (in 2005) and Sweden (in 2007) measuring the costs of cash and card payments in their respective countries.
The proposed commitments highlight the importance of establishing a common methodology which can be used by competition authorities across SEPA to calculate MIFs for immediate debit transactions in their local jurisdictions, and will establish a level playing field for all four party debit card systems operating in Europe.
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