EU updates pressure on Visa, MasterCard fee practices

European regulators have it again Spotlighted Visa Inc. (NYSE:v) and MasterCard Incorporated (NYSE:Ma). The latest round of scrutiny was zero. The scheme fees were charged to banks that encouraged card payments through the network.

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A new survey dispatched by the committee will clarify three key concerns, including the degree of choice that retailers will choose to accept visas and Mastercard, the value they receive from the fees they pay, and the transparency of these fees. According to Bloomberg, the investigation is in preliminary stages, but formal litigation and penalties could reach up to 10% of the company’s annual revenues.

The new scrutiny comes in recent comments from European Central Bank Christine Lagarde, who supported the deployment of the digital euro currency and reduced the bloc’s reliance on overseas payment networks.

Visa Inc. (NYSE:V) defends pricing by referring to security, minimal fraud risk, and uninterrupted services, while MasterCard Incorporated (NYSE:MA) justifies fees by highlighting consumer choice and global reliability. The ongoing nature of the investigation prevents the committee from making further comments.

Previously, MasterCard Incorporated (NYSE: MA) was fined $646 million in 2019 for artificially increasing the cost of card payments. The $30 billion settlement that the companies reached last year was rejected by a US federal judge. Adding new EU scrutiny to the list could encourage investor attention to Visa Inc. (NYSE: V) and MasterCard Incorporated (NYSE: MA). Currently, both stocks hold consensus purchase ratings, with their respective upward potentials at 10.39% and 10.72%.

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