EU probes cross-border Visa fees

Visa says its invests fees in new technology and security

The EU has begun an investigation into the charges made by Visa when a credit card user shops abroad.

Retailers have to pay, on average, 0.7% on each international Visa transaction, costing retailers hundreds of millions of dollars every year.

Visa says the fees are invested in new payment technology, security and argues its systems speed up shopping.

But big retailers like Ikea, Tesco and France's Carrefour complain that those fees are too high.

Pricing pressure

"High card fees hit consumers by putting pressure on prices and by discouraging all retailers from accepting cards," said Paul Skehan, head of the European Retail Round Table, which represents big retailers.

He said that Ikea pays around $141m (£70m) in cards fees every year.

Visa is hopeful it can work out a deal with the EU authorities.

"Our dialogue with the Commission has always been constructive, and we believe the best way forward would be to reach a new agreement," Visa Europe spokesman Paul Ravenscroft said.

The EU will try to establish whether Visa fees break European competition rules.

Last year the EU warned rival credit card firm Mastercard to drop cross-border card fees within six months or face fines.

It also warned Visa that it might start the in-depth investigation.