UPDATE 1-EU accepts Visa Europe fee cuts, drops probe

* Visa Europe to cut debit fees to 0.2 pct for 9 countries

* Reductions legally binding for 4 years

(Adds Visa Europe comments, detail, background)

By Foo Yun Chee

BRUSSELS, Dec 8 (BestGrowthStock) – EU regulators have dropped
antitrust charges against Visa after accepting the company’s
pledge to cut its debit card fees to one lower rate for domestic
and cross-border transactions across nine EU countries.

Visa will apply a 0.2 percent fee to all cross-border
transactions and domestic purchases in Greece, Hungary, Iceland,
Ireland, Italy, Luxembourg, the Netherlands, Malta, and Sweden,
which will be legally binding for four years.

The European Commission, which charged the credit and debit
card network in 2009 with blocking competition between banks
with its debit fees, tested Visa’s proposal to cut its fees to a
standard rate in May.

The European Union executive said Visa’s new rate would mean
a reduction of between 30 and 60 percent in its current fees.

The so-called interchange fees, which merchants pay to banks
and processing networks like Visa and MasterCard Inc (MA.N: )
every time a customer uses a credit or debit card, are a major
revenue earner for the companies.

Visa Europe, the European licensee of Visa Inc (V.N: ), gets
more than 70 percent of its payment transactions through debit
cards.

“Lower inter-bank fees will trigger real benefits for
merchants and consumers whilst more transparent rules will also
improve competition in the cards markets,” EU Competition
Commissioner Joaquin Almunia said in a statement.

The Commission said it would now close its case on the
issue.

Visa Europe said the changes would make it easier for
European consumers to pay for their purchases abroad.

“The agreed commitments on immediate debit interchange fees
and methodology are an important step towards the achievement of
the Single Euro Payment Area (SEPA),” Visa Europe Chief
Executive Peter Ayliffe said in a statement.

Visa Europe is still facing EU regulatory scrutiny over its
charges for consumer credit and deferred debit card
transactions.

MasterCard cut its transaction fees for its debit and credit
cards last April in return for the Commission scrapping its
investigation, but has gone to court to get a legal ruling on
the issue.

Visa and MasterCard settled a U.S. Justice Department
antitrust lawsuit over their processing rules in October.
(Editing by Rex Merrifield and Karen Foster)

UPDATE 1-EU accepts Visa Europe fee cuts, drops probe