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The retailers, who together have 250 million customers a week and include Asda/Walmart, IKEA, Kingfisher, M&S and Tesco, claim that Europe's payment card companies make €13 billion a year in revenue as a result.

They call on the Commission to order cuts in the fees card companies charge retailers for each transaction when it makes its long awaited ruling on the legality of the so-called interchange fees.

The Single Euro Payments Area (SEPA) is scheduled to be launched in January 2008 and is intended to create a Europe-wide system for efficient, low cost money transfers between EU countries. The retail chiefs say its success depends on the EC taking action to end MasterCard and Visa's price-fixing.

Their letter argues that if SEPA is launched with card companies allowed to continue the existing secretive and excessive charging regime, it could fail because the potential benefits to customers and businesses will be lost.

The British Retail Consortium (BRC), has led the fight against the charges, and long argued that they are an unjustifiable tax on customers.

BRC director general Kevin Hawkins said that the Commission's decision on these cross-border card charges has huge implications for individual and businesses throughout Europe. He accused MasterCard of “clearly abusing its position” to boost profits at massive cost to customers and retailers.

"The Commission claims its Single Euro Payments Area will do for card payments what the euro has done for cash but it will only deliver the cheap, easy system promised if MasterCard and Visa's price fixing is ended,” Hawkins said.

An interchange fee is the fee a retailer is forced to pay on each credit card transaction it accepts. Typically around one per cent of the value of a transaction, the fees cost retailers hundreds of millions of pounds each year. Some individual retailers pay tens of millions of pounds annually to credit card companies as a result of the fees.

The EC decision on the charges currently levied by MasterCard on cross-border transactions within the EU is expected in mid to late November.

The joint letter to the EU Commission from 14 major European retailers was co-ordinated by the European Retail Round Table (which brings together senior figures in European retailing) and EuroCommerce (which represents European retailing and wholesaling businesses).

Related links

• British Retail Consortium
• European Commission