INDEPENDENT NEWS

Alleged price-fixing in credit card interchange

Published: Fri 10 Nov 2006 09:39 AM
Media Release
Issued 10 November 2006/065
Commission alleges price-fixing in credit card interchange fees
The Commerce Commission has issued civil proceedings against Visa, MasterCard and 11 financial institutions for alleged price-fixing in relation to interchange fees.
In a Statement of Claim filed in the Wellington High Court yesterday, the Commission alleges that fixing the interchange fees is anti-competitive.
Interchange fees are charged by credit card companies. They are paid by retailers as part of the fees they pay to banks. The fee is up to 1.8% of each credit card transaction. Retailers are not permitted to charge customers extra to use credit cards, and so must recover the fees by increasing prices, regardless of whether customers pay by credit, cash or EFTPOS.
The Commission alleges that the following companies have been involved in anti-competitive arrangements relating to the fees: Cards NZ Ltd, Visa International, MasterCard International Inc, ASB, BNZ, Westpac Banking Corporation, Westpac NZ Ltd, ANZ, TSB, Kiwibank, HSBC, NZ Post, The Warehouse Financial Services Ltd and GE Finance and Insurance.
Transactions on New Zealand Visa cards and MasterCard cards totalled $19 billion in 2004, with 2.1 million Visa cards and 900,000 MasterCard cards in use.
The Commerce Act provides for penalties for price-fixing of up to $10 million per breach, or three times the commercial gain resulting from the breach, or 10% of a company’s turnover.
The Commission does not allege any collusion between Visa and MasterCard. The alleged price-fixing is between Visa and its shareholder financial institutions, and between MasterCard and its member financial institutions.
As the matter is before the Courts, the Commission will not be commenting further.
See... Release and background information (PDF)
ENDS

Next in Business, Science, and Tech

NZ EU FTA Coming Down To The Wire – Hold The Line, Says Business Forum
By: NZ International Business Forum
NZ space sector set to star in Moon mission
By: Ministry of Business Innovation and Employment
The Sky Is The Limit - Air New Zealand To Relaunch 14 International Routes In 16 Days
By: Air New Zealand
Cashing In On Carbon: The New Carbon Marketplace Helping Native Forest To Thrive
By: Carbonz
Entrust Dividend Will Be Welcomed After Another Tough Year
By: Entrust
NZ Economy: Prevailing Headwinds
By: BusinessNZ
View as: DESKTOP | MOBILE © Scoop Media