The EU has threatened antitrust action against the payment cards industry after an inquiry found that the current system is harming businesses and consumers in Europe.

<p>A preliminary report published by the European Commission has revealed that banks and networks put up barriers to prevent new entrants into their domestic payments sectors, while charging high transaction fees to consumers and businesses. The European payment cards industry is large, with 23 billion transactions made annually in the EU, with an overall value of E1,350 billion.<br /><br />The EU wants to see an integrated industry within the EU, with cross-border payments as cheap as national transactions. However, the report found that charges differ wildly in EU countries, with fees for businesses varying by up to 650% for MasterCard and 500% for Visa.<br /><br />Competition commissioner Neelie Kroes said: The payment cards industry in Europe remains national and some local players are preventing competition from developing. This pushes up payment card costs for consumers and businesses. Competition law and sector regulation must work together to create a better environment for business.<br /><br />A recent report from UK price comparison website uSwitch into fees charged by credit card companies has illustrated the hidden costs from using payment cards abroad. Loading fees, transaction fees and cash withdrawal fees, typically a percentage of the purchase price, add up to an extra GBP607 million a year for UK card users. The commission&#0039;s goal of creating a single European payments area would force the payments industry to charge similar prices at home and abroad.</p>