In a media release dated 18 September 2013, the Competition Commission of Singapore (the “CCS“) announced its clearance of the notification for decision (the “notification“) which was received from Visa Worldwide Pte Ltd (“Visa Worldwide“) in January 2006 in relation to its multilateral interchange fees (“MIF“) system. The CCS had to assess whether the MIF system was in breach of section 34 of the Competition Act (the “Act“).
Section 34 of the Act prohibits agreements between undertakings, decisions by associations of undertakings or concerted practices which have as their object or effect the prevention, restriction or distortion of competition within Singapore.
Visa Worldwide is part of the Visa Group which operates the Visa Network, a global electronic payment platform. The notification decision here relates to the Visa Network, specifically in relation to Visa cards, which are accepted by a wide range of merchants in Singapore as payment for goods and services. In assessing the notification, the CCS had to review the card payment industry in which the Visa Group operates in markets within Singapore. The Visa Network is an open loop payment card network which involves third- party issuers and acquirers for each payment transaction. As the scheme administrator, the Visa Group settles the necessary amounts with the issuer and acquirer separately and bilaterally. The Visa Group’s MIF system is used to determine the default level of interchange fees payable by the acquirer to the issuer for a payment card transaction. Interchange fees are required as part of the contractual arrangement between the Visa Group and its members.
The CCS had to assess whether the MIF system has the object or effect of preventing, restricting or distorting competition within Singapore.
In assessing whether the MIF system has an appreciable adverse effect on competition in any of the relevant markets in Singapore, the CCS compared the present state of competition in each of the market with the degree of competition that would exist in those markets if the MIF system was not in place.
The CCS concluded that the MIF system has not resulted in an appreciable adverse effect on competition in Singapore in any of the relevant markets and does not infringe section 34 of the Act.
Reference materials
The following documents are available from the CCS website www.ccs.gov.sg:
- Media release dated 18 September 2013
- Clearance decision dated 3 September 2013
- Notification for decision dated 1 January 2006
CCS clears multilateral interchange fees system in card payment network as not ...
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