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Visa defends credit card fees

Mon, 24 Oct 2005

Visa has defended its credit card charges, which have been branded as "unduly high".

The Office of Fair Trading (OFT) has said that Visa charges its credit card customers excessive fees when they pay for purchases on their credit cards.

The OFT revealed that it might decide to take action against the credit card provider because it infringes competition rules.

Mastercard also came under scrutiny by the OFT earlier this year for what was described as "extraneous" costs charged to credit card holders.

Visa UK's managing director, Colin Grannell, responded to the OFT's claims by saying the credit card provider was "not surprised", although Visa is "disappointed with some of the words used".

Mr Grannell added: "We do not agree that the rates are unduly high."

There are nearly 43 million Visa credit cards issued in the UK, with credit card holders spending over £87 billion a year on their credit cards.

Which? has warned that retailers will have to cover the costs elsewhere if interchange fees are brought down.

The consumer group pointed out that it is unlikely that credit card customers will benefit from lower interchange fees.

"I would hope that the benefits would be passed on but it is doubtful. If retailers save one per cent by not having to pay these fees will they pass the gain on?" Mike Naylor, principal researcher at Which?, commented to Reuters.

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