From Prof Merlin Stone.

Sir, I hope that the European Commission’s ban on MasterCard’s use of cross-border interchange (report, December 20) does not unduly influence the Office of Fair Trading’s own inquiry into the domestic use of the payment system. The British Retail Consortium claims that decision is a “major victory”. However, I doubt whether retailers’ motives for banning interchange are wholly altruistic. In Australia, where interchange fees have been regulated since 2004, there are no signs that retailers are passing on the fee reduction to consumers. Indeed, the cost of credit has increased as banks have sought other ways to recoup the costs of running a payment system.