As per a news report by the Wall Street Journal, the European Union has levied a fine of USD 650 million on Mastercard for inflating fees.
The news report states that the European Commission has fined the American multinational services firm for breaking antitrust rules. Apparently, Mastercard had increased its payment processing fees. As a consequence, consumers and retailers had to pay higher prices.
This fine comes as a piece of good news for crypto enthusiasts because the selling point of digital currencies is their ability to eradicate the need for third party service providers.
According to the EU regulator, Mastercard purportedly prevented retailers from looking at lower back rates outside of their national territory. As a consequence, cross border competition was restricted, hence it meant that the retailers and consumers had to pay high prices.
The investigation took about 6 years to complete and it involved the ‘interchange fees’ which is charged by banks to merchants when customers purchase something with their credit cards.
By limiting the geographical territory, the Ameican credit card company prevented merchants from finding better rates. Such a saving could have been passed on to the customers.
European Union’s Competition Commissioner, Margrethe Vestager explained,
“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.”
In its reply, Mastercard explained that the malpractice had been stopped long time back and that it will accept the fines,
“This decision relates to historic practices only, covers a limited period of time of fewer than two years and will not require any modification of Mastercard’s current business practices.”
Interestingly, this was not the first time that Mastercard has been fined for overcharging. In September 2018, the company, along with the likes of Visa, had settled a fine of USD 6.2 billion.
While Mastercard is facing the ire of the European Union, the credit cards company, however, has been very accepting of Blockchain Technology. In December 2018, the company had filed a patent to make Blockchain transactions anonymous. Back in October, Mastercard had also filed a patent to apply fiat banking’s principles to the crypto space.