The European Commission has launched a competition probe into payments card giant Visa Europe. The investigation will look at fees for cross-border transactions.
Europe's top regulator said the in-depth investigation would specifically target so-called interchange fees which banks charge on payments made at retail outlets.
'If the multilateral interchange fee is set too high or if there are insufficient benefits passed onto consumers then consumers can end up paying higher prices,' commission spokesman Jonathan Todd said.
A spokesman for Visa Europe, which is independent of San Francisco-based Visa Inc, said the launch of the probe was 'a standard procedural step' and it defended the use of interchange fees.
'We see no evidence that Visa Europe's interchange has acted as a tax on consumption or has caused consumers to pay twice,' he said, adding that a cut in interchange fees would shift costs from retailers to consumers.
In December, EU regulators ordered Visa's arch-rival MasterCard Europe to scrap fees they consider unjustified on cross-border transactions or face hefty daily fines. MasterCard decided earlier this month to fight the ruling with a court challenge.
After promising reforms in 2002, Visa Europe had an exemption from EU competition rules for its interchange fees but it expired at the end of 2007, prompting the new investigation into its practices.
Since October Visa Europe, which is owned and governed by its 4,600 European member banks, has operated independently of US-based Visa Inc, which was floated on the New York Stock Exchange earlier this month.
