Mastercard and Visa have agreed to slash the fees charged for payments within the EU using debit and credit cards issued in a foreign country, the European competition watchdog said today. Multilateral exchange fees that are charged to retailers will be cut by around 40 per cent , which will “significantly reduce the costs for retailers” when they accept payments made with cards issued outside of the European Economic Area (EEA). Read more: Court resurrects £14bn Mastercard mega-claim The change will trickle down to customers, as the fee was previously included in the final price, and is expected to “lead to lower prices to the benefit of all European consumers”. EU competition commissioner Margrethe Vestager said: “The commitments, which are now binding on Visa and Mastercard, will reduce the costs borne by retailers for accepting payments with cards issued outside the EEA. “This, together with our January 2019 decision on Mastercard’s cross-border card payment services, will lead to lower prices for European retailers to do business, ultimately to the benefit of all consumers.” The legally binding commitments, which will apply for five years and six months, follow a string of disputes between the competition commissioner and the payment companies. Read more: Mastercard and Visa lose battle with supermarkets over card charges The commissioner first raised the issue of Mastercard’s interchange fees in December 2007, saying the practice restricted competition between banks. In January this year, the commission fined Mastercard €570m for obstructing merchants’ access to cross-border card payment services.