Payment Giant Mastercard Fined $650 Million By EU as Crypto Gains a Notch on the Global Finance Belt
The European Union fined Mastercard Inc. €570.6 million ($648.2 million) for artificially raising the costs of card payments inside the bloc, continuing a European crackdown on U.S. credit-card companies over fees.
Credit-card firms charge so-called “interchange fees” to retailers’ banks whenever a customer uses a credit or debit card for payment in a shop or online. These fees used to vary from country to country within the EU. Mastercard had historically prevented retailers from shopping around for lower bank fees available outside of their home country. This led to higher prices for both retailers and consumers and limited cross-border competition.
The investigation yielded some damning results for the company: Retailers who accepted Mastercard paid more in interchange fees than they would have if given the ability to freely shop for a better deal.
Margrethe Vestager, the Union’s competition commissioner, stated;
“By preventing merchants from shopping around for better conditions offered by banks in other member states, Mastercard’s rules artificially raised the costs of card payments, harming consumers and retailers in the E.U.”
The E.U. has gotten quite serious about reducing fees for consumers over the past few years. In 2015 they announced a maximum rate of 0.2 percent for debit card fees and 0.3 percent for credit card fees.
What’s surprising is that Mastercard didn’t suffer on the stock market today despite over half-a-billion dollar fine, and this is because they obtained it by sketching it in the fourth quarter of 2018, so shareholders and investors saw this coming a mile away.
This is why decentralized financial institutions are required to replace the existing ones. Not only do they capture the market through unfair and unjustified means, they most of the times succumb to malpractices in their operations. The good news is that we are already on that path. Bitcoin is set to overtake Mastercard in daily transactions any time soon.