The European Commission said today it had exempted Visa International from competition rules, permitting it to charge so-called interchange fees to merchants who accept Visa cards, but at a reduced rate.
The action ends an investigation into these fees, prompted by complaints from European retailers represented by trade association Eurocommerce.
The Commission said the fees, which are charged on each transaction, "will not only be reduced in absolute terms, but will also be capped...significantly improving the situation for retailers and ultimately the consumer".
Nearly two years ago, the Commission had expressed concerns about the system.
Eurocommerce first complained about the fee five years ago. Visa asked for a waiver from antitrust rules which would prohibit it from charging such a fee. After negotiations, Visa agreed to reduce but not eliminate the fee.
The Commission said the fees were too high, amounting to about 80 per cent of the amount paid by a merchant to a bank each time a Visa card was used.
After negotiations, Visa agreed to reduce but not eliminate the fee.
Eurocommerce has said the approach of the Commission falls short and has done little to counter an abuse of monopoly power by Visa.