The European Commission is dropping its competition case against MasterCard Europe after the group lowered fees on cross-border payments.

Europe's top competition watchdog had threatened to fine the company if it did not bring down the fees it charges on cross-border transactions in Europe.

Under pressure from the commission, MasterCard came up with a new fee structure, which will cut levies on consumer credit card transactions by more than half to 0.3% of the price of the purchase on average.

The fee on consumer debit card transactions will be reduced to 0.2% under the changes, which also aim to make the terms of using cards more transparent for sellers.