UK victory bolsters Fair Payment Alliance

Gavin Lipsith

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The Office of Fair Trading has ruled that MasterCard's UK multilateral interchange fee is uncompetitive

The Office of Fair Trading (OFT) has agreed with arguments presented by the travel-retail industry's Fair Payment Alliance (FPA) that MasterCard UK is imposing illegal charges on retailers. In a report published earlier this month OFT condemned the credit card company's multilateral interchange fee, which represents between 80-90% of charges imposed on retailers for card payments, as being uncompetitive.

OFT has taken two years to publish its decision as a result of intense lobbying efforts from MasterCard and VISA, which will shortly be the subject of another OFT report on multilateral interchange fees. Although the findings only apply to the UK market, industry campaigners believe that the report, combined with similar decisions by Dutch and Spanish authorities, is a significant boost to the global campaign to eliminate unfair charges set by credit card companies.

"This will strongly support our efforts at the European Union and on the international level, where our American colleagues have started their own campaign," said FPA campaigner Graham Austin. "The campaign is a case of small but important steps and this outcome strongly shows that acting together will eventually bring major results for the good of the whole industry."

Austin added that he expects MasterCard to appeal the decision, although he said that the OFT was unlikely to be swayed as its findings were "very strong".

Kappe International chairman and FPA campaigner Jacques Parson urged industry representatives not already involved to join the FPA campaign. "We still have much work to do in order to reach our ultimate aims of a globally fair and transparent framework with the card companies," he said.  "In order to bring further successes, I encourage those who are still not members of our group to join forces with us."