OFT to Investigate Visa 'Intercharges'
Office of Fair Trading issues 'Statement of Objections' concerning Visa intercharges, as prelude to full investigation
20th October 2005
The Office of Fair Trading (OFT) is to conduct a full investigation into the UK operations of credit card giant Visa, after concluding that the fees charged between banks as part of the payment clearing process were being kept 'unduly high'.
The fees concerned are known as 'intercharge fees', and are made by the card issuing bank to the retailer's bank when a card transaction is being processed. This fee is then passed on to the retailer as part of their banks handling fee, and so is ultimately passed on to the consumer in the form of higher retail prices.
The OFT has said that the agreements in place between the banks operating under the Visa system restricted competition, and kept the charges artificially high in contravention of both UK and EC laws.
Visa and its members now have the opportunity to respond to the OFT's objections, before the watchdog decides how to proceed. If the issue remains unresolved, Visa could be forced to lower the charges or even fined.
Read More: OFT Press Release
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