MasterCard responds to European Commission's Sector Inquiry into Credit Cards

MasterCard notes the publication by the European Commission of the initial findings in its Sector Inquiry regarding payment cards. MasterCard is studying this lengthy report and will be responding with comments within the Commission’s required deadline. At this stage, we are unable to comment further on the specifics of this paper.

MasterCard has always been committed to an open and competitive single market for card payments in Europe, which underpins the position of the European Commission. Indeed, MasterCard, working alongside the European banking community, is currently implementing major changes to the European cards landscape through delivery of the SEPA cards framework. MasterCard has already made, voluntarily, a number of changes to its rules and practices in order to encourage greater competition and more efficient card payments, and looks forward to continuing its work with the Commission and the banking community to achieve this end.

It is important to recognise that the European card businesses (both credit and debit) are complex and diverse, and that change must protect the integrity and viability of payments for all stakeholders. We therefore think it is unfortunate that the Commission has labelled the charges levied by banks on merchants for accepting payment cards as a “tax” on sales. Under this logic, every cost a retailer incurs could likewise be called a “tax”. The truth is that cards are a more efficient, more secure and more convenient means of payment than cash for both consumers and for retailers. Reducing these charges on retailers, through regulatory intervention, would not make the costs of running a payment system disappear – rather, European citizens would end up paying a greater proportion of the costs for running card payment systems.