The American group Visa insisted on being able to overcharge its prices compared to those of the competition. He even took the matter to court, without success.
Pascal Michel / ch media
Visa is one of the largest electronic payment networks in the world.Keystone
The Competition Commission (Comco) has found a solution with one of the bank card giants. Since last summer, Mastercard can only charge an interchange fee of 0.12% on debit cards. This is a tax that is paid to banks through merchants. These use the revenue to invest in necessary infrastructure and to encourage innovation.
Visa, the world’s second-largest card giant, was less cooperative. She did not want to put herself at the level of the competition and defended herself legally. The company feared a “clearly perceptible economic disadvantage if facts were established without Visa’s participation in the market or if interchange fees were agreed that were not sustainable in the long term.” Currently, the interchange rate for Visa debit cards averages 0.20%.
Visa’s arguments are “not valid”
Visa has just been rejected by the Federal Court. The group wanted to have its current costs considered admissible until the end of the Comco investigation. Furthermore, the group wanted to be exempt from possible sanctions.
Visa lamented that legal uncertainty made its products less attractive. The different players within the payment system could use competitors’ offers instead of Visa cards. This is an “irremediable inconvenience”. In their judgment of December 4, the judges however considered that this argument was “not valid”. Most consumers are unaware of the fees that are charged. There is therefore no risk of loss of market share.
The Federal Court further emphasizes that interchange fees are not paid to the card companies as licensors, but are paid by merchants – and therefore indirectly by consumers. If necessary, merchants could be led to favor Mastercard cards or solutions like Twint. But again, the court sees no problem. Indeed, the competitive disadvantage denounced by Visa would remain even if the competition authorities accepted Visa’s higher rate until the end of their investigation:
“This would not help Visa in relation to merchants. Traders could still fall back on a more advantageous alternative.
The Federal Court
-For banks that issue debit cards, higher interchange fees are even more attractive, lawyers argue. In fact, they directly benefit from the tax as card issuers. Visa could even gain market share. As the Federal Court was unable to identify “irreparable harm”, it decided not to entertain Visa’s appeal.
The Visa group is currently continuing its negotiations with the competition authorities in order to find an amicable solution. Discussions on this subject are underway, we learned from Comco. In August, Visa was still “confident” of quickly reaching an agreement with Comco. Apparently it will take longer.
As part of its investigation, Comco examines what the acceptable fee rate is. Visa can avoid in-depth analysis if both parties agree amicably. Otherwise, Comco may unilaterally decide the percentage. But it may also turn out that the rates applied by Visa are acceptable, according to Comco. In this case, the decision would be suspended. Whatever the result, Comco’s decision can again be challenged all the way to the Federal Court.
Judgment 2C_170/2024 of December 4, 2024.
Translated from German and adapted by Chiara Lecca
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