Mastercard slapped with €570m fine by EU antitrust watchdog over fee limits

The European Commission has hit Mastercard with a €570.6m (£501.2m) fine for limiting the ability of banks to shop around for lower fee structures among member states.

"By preventing merchants from shopping around for better conditions offered by banks in other member states, Mastercard's rules artificially raised the costs of card payments, harming consumers and retailers in the EU," said EU competition commissioner Margrethe Vestager in a statement today.

Mastercard levies a so-called interchange fee on all transactions made between two banks using one of its cards, which covers the costs of handling, fraud and the risk associated with the payment.

The rate Mastercard could charge banks differed among the 28 member states until the EU imposed a bloc-wide cap on interchange fees in 2015. It is now set at a maximum of 0.3 per cent of the transaction, depending on whether it involves a credit or debit card.

The fine was reduced by 10 per cent because Mastercard agreed to co-operate with the investigation.

Mastercard said the fine would be taken as a charge in the fourth quarter of 2018, the impact of which will be revealed in its full-year results next week.

The card-issuer said the closure of the investigation put to bed a legacy dispute for the firm, and was an important milestone in its history.

"This decision relates to historic practices only, covers a limited period of time of less than two years and will not require any modification of Mastercard's current business practices," it said in a statement.