The European Commission charged MasterCard for imposing excessive fees when cards issued outside of the European Union are used within its member states. As a result of MasterCard’s rules, all consumers (even those who pay in cash) will have to bear the burden of higher costs for good and services as interchange fees continue to soar. Why? The answer is simple. According to the European watchdog, since the bank of the retailer pays an interchange fee to the cardholder’s bank the retailer must pay a percentage of the transaction to the customer’s bank. For example, if a card from India is swiped at an Italian store, the shop owner may have to pay fees up to five times higher than the original cost.
The European watchdog said that it is concerned that MasterCard’s rules on cross-border transactions prevents cross-border trade due to high fees.
