The European Commission will give credit card company MasterCard (MA.N: Quote, Profile, Research) six months to reconfigure the fee it sets for processing transactions or face daily fines, an industry source said on Wednesday.
"MasterCard will be told they have to cease and desist from applying the current interchange fees and if they don't do it within six months they will start getting fined," an industry source said.
"This order does not prevent MasterCard and member banks from adopting an entirely new multilateral interchange fee that can be clearly proven to fulfill four conditions of article 81.3 (of the EU treaty on fair competition)," the source said.
The European Commission is set to make its ruling on MasterCard on Wednesday.
EuroCommerce, which represents millions of retailers across the 27-nation EU, had complained to the EU executive about the interchange fees set by MasterCard for cross-border purchases.
Shops and other providers pay fees to their banks for each MasterCard purchase. The U.S. card firm sets many fees, which together average around 1 percent of the purchase price.
The seller's bank then pays the "interchange" fee to the cardholder's bank.MasterCard has said it should keep the principle of setting its own fees and that the EU executive has no power to cap them.