The Office of Fair Trading (OFT) has criticised the multilateral interchange fee (MIF) charged by credit card provider Visa.
The fee constitutes an agreement between Visa and various banks on the amount of money paid for every Visa card transaction.
However, the OFT has ruled that the Visa MIF restricts competition because the high charges are passed down the supply chain and eventually result in higher prices for consumers.
The ruling could result in lower fees but financial experts remain divided over whether this will result in lower prices for consumers.
A statement released by the OFT said: “The OFT believes that, like the MasterCard MIF agreement, the Visa MIF agreement leads to an unduly high fee being paid to card issuing banks by merchant acquirers on every Visa transaction.
“The cost of these fees is passed on to retailers and ultimately to consumers.”
The OFT ruled that the MasterCard MIF was anti-competitive in September 2005. The credit card provider has appealed the decision and the case is ongoing.
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