Mastercard has lost its legal battle with the European Commission over payment fees following a ruling by the European Court of Justice.

The verdict on Thursday (11 September) threw out the firm's appeal against a commission decision dating back to 2007, in which the EU executive ordered Mastercard to repeal its cross-border card fees.

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Mastercard has lost its long-running legal battle with the EU over its card payment fees. (Photo: YayAdrian)

The fees - known as "multilateral interchange fees (MIFs)" - are paid between the banks of a retailer and customer every time someone pays for items by card. The fee is charged to the retailer's bank who, in turn, normally factors it into the price paid by consumers.

At present, average fees range from around 0.2 percent in Denmark and the Netherlands, to over 1 percent in Germany, Hungary, and Poland, raking in around €6 billion per year to credit card giants across the bloc.

In its judgement, the EU court found that the fee structure could not be described as being "objectively necessary" as the system was "still capable of functioning without those fees."

There was also an "absence of ... appreciable objective advantages" to either retailers or consumers from the system.

The court ruling comes more than 20 years after the commission originally launched proceedings against Mastercard in 1992.

Antoine Colombini, the Commission competition spokesman, described the ruling as "a big win for European consumers who for too long have been paying unjustifiably hidden fees".

Javier Perez, the president of Mastercard Europe said it would have "little or no impact on how MasterCard operates," although he conceded that it was "disappointing".

But the ruling was welcomed by consumer and retail groups.

"We are hugely pleased at this decision," said Christian Verscheuren, director-general of trade association EuroCommerce. He added that Mastercard should "re-assess its fees, not only cross-border but at national level also.”

Mastercard's rival Visa agreed last year to cap its fees at 0.3 percent of the transaction in response to an anti-trust case brought by the commission.

MEPs and ministers will resume discussions in the coming weeks on whether to agree a proposed payment services directive, which seeks to cap charges for card payments at 0.2 percent and 0.3 percent for debit and credit cards respectively.