Visa 'unfair to exclude US bank

The European Commission yesterday accused global credit card and payment system company Visa International of breaching EU competition rules by refusing to admit American bank Morgan Stanley to its network in Europe.

Visa, an unlisted grouping of 21,000 banks and financial services providers, retorted that it was defending competition by denying a direct competitor access to its proprietary information.

A statement from the commission said the decision by Visa to bar the American investment bank from its network of connected shops and merchants in the EU because it operated the rival Discover card in the United States was discriminatory.

Owners of several other payment card schemes had been admitted as Visa members - notably Citigroup, which owns the global Diners Club network.

"The commission is concerned that this Visa membership rule is not applied in an objective and non-dis criminatory manner vis-a-vis all applicants for Visa membership," it said.

"Visa has failed to explain why a global network such as Diners Club, which operates in over 200 countries including Europe, should be less of a threat to Visa than a regional network like Discover, which operates only in the US and does not have any presence in Europe," it said.

David Masters, a spokesman for Visa International in London, said that since Morgan Stanley operated a rival credit card, "any decision that allows them access to proprietary Visa information will inevitably reduce competition between payment systems".

Visa has three months to respond to the commission's concerns and can request an oral hearing.