Multilateral interchange fees under competition law and the recent payments legislative package

Abstract

This research project explores how multilateral interchange fees are considered under EU competition law, particularly after the Visa Europe and MasterCard judgements. It also analyses how the recent EU Payments Legislative Package has aided in the creation of a harmonized payments market and in increasing competition. Section 1 examines a number of key concepts related to multilateral interchange fees including the relevant market and the difference between three and four-party schemes. Section 2 focuses on the recent Visa Europe and MasterCard cases, giving a detailed overview of the EU courts‟ assessments and conclusions. A few probes by national competition authorities are also discussed. Section 3 focuses on the Payments Legislative Package consisting of the Interchange Fee Regulation and the amended Payments Services Directive II. It looks at how the new legislation will potentially solve the issues related to competition in relation to the cases discussed in section 2. The research project then concludes by highlighting how competition law and regulatory intervention complemented each other in curbing the anti-competitive effects of multilateral interchange fees and in creating a more competitive card payments markets.