Friday, October 27, 2006

"MasterCard® to Defend Role in EU As Middleman in Processing Fees" (WSJ)

According to the Wall Street Journal (Oct. 27, page A6, U.S. edition), E.U. regulators have set a hearing in mid-November on MasterCard International's® role in setting bank fees and to discuss lowering banking costs. The article reported that the average fee for credit and debit cards in Europe is 1.16% and 0.8%, respectively. This raises the question of how can the banking cartel force extraordinarily higher rates in the U.S.?

Carl Munson, an associate MasterCard general council was quoted in the article as saying: "We continue to assert that interchange fees are necessary in a four-party system." While Mr. Munson explained that the value to the system is to elevate the level of competition and efficiencies. To us, it seems that the greater benefactor of the fees are the banks at the expense of retailers and consumers.

[Source: via WSJ]