Large European retailers are asking the European Commission to address the fees charged by credit card issuers like Visa and Mastercard.
According to a report, these retailers want these fees reduced. The message was said to be sent in a letter, addressed to the Commission’s antitrust chief, Teresa Ribera, Financial Services Commissioner Maria Luís Albuquerque, and Economy Chief Valdis Dombrovskis. Dated May 13 and pointed to data provided by The Brattle Group, which indicated there has been a cumulative increase in International Card Schemes (ICS) fees of 33.9% between 2018 and 2022.
A Visa spokesperson explained:
“This includes extremely high levels of security and fraud prevention, near-perfect operational resilience and reliability, and a wide range of consumer protections and high-quality, innovative products and services that serve consumer and merchant needs.”
While the digital Euro, a central bank digital currency (CBDC), is mentioned, stablecoins—an alternative to legacy payment rails operated by firms like Mastercard and Visa—are not.
Europe is pursuing a digital Euro, unlike the US, where the initiative is dead in the water due to privacy concerns and fears of governmental abuse.
Depending on how things evolve, stablecoins may provide a faster (immediate), safer, and less expensive method of transferring value.
TrueLayer CEO Francesco Simoneschi says the issue raised by the European retailers reflect the reality that for too long businesses have been “trapped” in an opaque system without any competition or choice.
“The card schemes have turned complexity into a business model, layering fees on top of fees in a way that is impossible to navigate, let alone challenge. This leaves merchants with an impossible decision: absorb the rising costs or pass them on to their customers, explained Simoneschi. “The steady increase in fees (nearly 34% in just four years) without a corresponding improvement in service is a clear indicator of the harm caused by a duopoly. We believe payments should be fair, simple, transparent, and competitive. That’s why we support merchants’ call for the Commission to level the playing field, and why we continue building a fairer and more secure alternative for merchants and consumers alike.”
Earlier today, it was announced that Mastercard would be partnering with Moonpay, a digital wallet that enables payments, transfers and crypto trading. This could be a path for a better, more efficient service in the long run. Of course all of this is contingent on how the EU manages the changing payments ecosystem and whether a digital Euro will become reality.