The European Commission is ramping up scrutiny of Visa and Mastercard—this time not over interchange fees, but a lesser-known (and less regulated) segment of the card payment ecosystem: scheme and processing fees. Though no formal investigation has been launched, the Commission has sent information requests to acquirers, retailers, and payment processors to gather details about the charges these networks impose on businesses to access their infrastructure and value-added services.
Shares of both Visa and Mastercard fell more than 1% following Reuters’ news last week, as investors priced in the potential for a new round of regulatory battles in Europe. While both companies acknowledged the European Commission’s interest in their most recent annual reports, the full scope and legal theory of the probe remain uncertain.
What is clear, however, is that the Commission’s focus has shifted from regulated interchange fees to network-imposed fees—costs that acquirers and merchants pay directly to the card schemes. These fees include both mandatory charges for participation in the network and optional services bundled into acquirer contracts.
The UK Showed the Way
Across the Channel, the UK’s Payment Systems Regulator (PSR) recently concluded a multi-year review of these same network fees and came to the conclusion that Visa and Mastercard operate in a market with insufficient competition, and fee increases in recent years appear largely detached from cost increases or innovation.
The PSR’s final report, released in March 2025, noted that the average scheme and processing fees had risen by over 25% in real terms between 2017 and 2023. More importantly, the report emphasized that acquirers often lack the bargaining power to push back, and that merchants have little choice but to accept these costs, given the “must-take” nature of Visa and Mastercard-branded cards.
The UK regulator outlined a series of remedies focused on transparency, governance, and financial reporting—each designed to expose and constrain arbitrary fee increases without intervening directly in pricing.
The Back Door for Remedies
The Commission is likely trying to determine whether Visa and Mastercard should be treated as dominant firms under Article 102 TFEU. If so, practices such as bundling optional services, charging disproportionate fees, or restricting interoperability could be viewed as abuses of dominance.
Visa and Mastercard process over 95% of card payments in many EU member states. Add to that the absence of viable alternatives for merchants and the persistent complexity of pricing, and the Commission may find a legally plausible route to treating at least one of the two schemes as dominant in the EU.
The purpose of a formal investigation won’t be to fine the companies. That wouldn’t eliminate the antitrust concerns and companies have huge amounts of cash to pay. Any potential remedy will aim at creating more powerful EU payment companies, possibly new rivals and payment alternatives.
What’s at Stake?
If the European Commission does open a formal investigation and eventually finds an abuse of dominance, the consequences could be significant for the companies:
- Fines: EU law permits fines of up to 10% of global turnover. For Visa and Mastercard, that would translate to a theoretical maximum of $3.6 billion and $2.8 billion respectively, which is unlikely. A more conservative penalty could still land in the hundreds of millions, but this won’t have a significant impact on the company. Mastercard had more than $14 billion in cash at the end of 2024.
- Remedies: Perhaps more consequential than any fines would be enforced changes to fee structures, contractual practices, or the bundling of services. For example, if the European Commission were to require card schemes to provide greater transparency about the types of fees they charge—including the amounts and the specific services they cover—it could increase competition between Visa and Mastercard, putting downward pressure on fees. Similarly, a prohibition on bundling certain services could open the door to third-party providers, fostering greater market diversity. These shifts could erode profit margins; given the sheer volume of transactions processed, even a small reduction in fees could translate into billions in lost revenue annually.
- Private litigation: A finding of abuse would also likely open the floodgates to merchant-led damages claims, adding to already substantial long-tail legal risks. Precedent exists: similar claims followed the Commission’s earlier decisions on interchange fees and continue to generate litigation—particularly in the UK, where collective actions and follow-on claims remain active.
- Investor sentiment: A shift in regulatory posture—even without a fine—could reprice the perceived risk premium around card networks.
The Political Layer
Beyond legal theory, this case touches on a politically sensitive issue in Europe: the concentration of critical payment infrastructure in the hands of two US-based corporations.
Over the past few years, European policymakers—from the European Central Bank (ECB) to the European Parliament—have warned about the risks of excessive reliance on Visa and Mastercard. The ECB, in its reports on retail payment strategy, has openly advocated for European alternatives to global card schemes. In addition to the antitrust probes, the risk of new rules or legal requirements, whether is on the upcoming PSD3, or through other digital rules is a real possibility.
Any new antitrust scrutiny of Visa and Mastercard is therefore not just a legal matter. It is increasingly entangled with industrial policy, financial sovereignty, and geopolitical positioning.
