Credit Cards Online Information

The Visa credit card network has come under fire for charging too much every time consumers make a transaction.

The Office of Fair Trading said an agreement between Visa and the banks that issue cards breaches competition law.

The dispute concerns the 'interchange fee', which covers the cost of handling card transactions and is levied on retailers each time shoppers make a purchase.

The OFT said the agreement led to an 'unduly high fee' being paid to the banks. This cost, it added, was ultimately passed on to consumers through higher prices.

The competition watchdog has issued a statement of objection about the fees, and the parties involved now have the chance to respond before a final decision is made.

Colin Grannell, managing director of Visa, said: 'We do not agree that the rates are unduly high.'

Last month, the OFT ruled that a collective agreement between MasterCard and its members was anti-competitive.

It said that between March 2000 and November 2004, they were setting the fee too high so they could recover costs elsewhere " such as those incurred by interest-free periods.

# posted by Medical Information : 2:50 AM