Turkey’s Competition Authority has initiated an investigation into Mastercard and Visa to assess whether their regulations prevented payment institutions from offering services to merchants operating abroad.

Investigation Aimed at Compliance with Competition Rules

The board launched this probe to ensure that the two companies have not contravened competition laws by complicating the operations of payment service providers. This could include restrictions on overseas businesses using payment or point-of-sale (POS) infrastructure provided by banks under the scope of Banking Law Number 5411.

Payment institutions in Turkey can offer services to consumers making payments to merchants abroad through bilateral agreements. Under these agreements, international transactions are localized, enabling transactions without Mastercard’s or Visa’s cross-border transaction fees.

During on-site investigations, it was found that Visa and Mastercard used various methods, including sanctions against banks, to thwart the activities of payment institutions that entered into such bilateral agreements.

Second Investigation on Global Operations

A second investigation has been opened for the global card payment systems market. The focus is on allegations that Mastercard and Visa have prevented merchants abroad from using card payments and POS infrastructure, as well as removing alternative payment solutions.

The absence of competition benefits Mastercard and Visa. Merchants have had to cope with rising card processing fees, notably a 25% increase above inflation by Visa since 2017. Following Brexit, Mastercard increased cross-border interchange fees between the UK and the EU fivefold, resulting in significant additional costs for businesses and consumers.