Mastercard called a rip off

30 November -0001

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Mastercard, one of the UKs most popular credit card companies has been given notice to change it's unfair payment practises, or face a huge fine.

According to the OFT, Mastercard has been found to charge an unduly high interchange fee, which could be pushing prices up, even for those who don't use Mastercard.

John Vickers, OFT chairman, says: "The parties to this collective agreement set the interchange fee to derive revenues from retailers and their customers over and above the costs of providing the payment services.
"This unduly high interchange fee was like a tax on UK consumers."

The fees they charge are in breach of European competition laws.

But John Bushby, general manager of MasterCard Northern Europe, said he was "very disappointed" by the OFT’s decision.
"We have consistently shown not only that default interchange fees have paved the way for a large number of new entrants into the UK credit card business over the past decade, but also that the UK payment system is one of the most competitive in the world,"

Since last November MasterCard has introduced new arrangements for setting the fees, but the OFT said it still had concerns that these were being set to include extra costs. It expects to start another investigation unless MasterCard addresses its concerns.

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