Focus shifts to retailer charges
The Office of Fair Trading (OFT) has dropped its original investigation into Mastercard's transaction fees to concentrate on a fresh probe into the credit card giant's charges to retailers.

The watchdog has attacked Mastercard for charging interchange fees to retailers to recover costs. An OFT spokesman said: 'These charges are unfair and represent a tax on consumers and a tax on small businesses. We want to get a better deal for both.'

The OFT issued a ruling against Mastercard in September last year, when it ruled the charges must be cut, saying that they were anti-competitive and unfair to consumers - who ultimately pick up the bill. It also accused the company of using the money generated from these fees to offset costs incurred by incentives it offers, such as interest-free payment periods.

The OFT stressed that it was not backtracking by dropping the original investigation and data collected during the six-year investigation will be carried forward into the new investigation.

The OFT expects to issue a new statement of objections by the end of the first quarter next year.

It is also looking into fees charges by Mastercard's rival Visa.