The European Commission has prohibited the multilateral interchange fee (MIF) levied by MasterCard on cross-border payments. The MIF applies to cross-border transactions using a MasterCard or a Maestro card, as well as to domestic transactions in eight Member States. The Commission found that the MIF restricted price competition between banks as it inflated artificially the base prices charged by banks for accepting payment cards. During the four years of investigation, MasterCard failed to demonstrate that the MIF had any positive effects on innovation and efficiency. The Commission has therefore concluded that the MIF is incompatible with the European Union's competition rules and has given MasterCard six months to end the scheme. Failure to do so could result in the imposition of daily penalty payments of 3.5 per cent of MasterCard's global turnover. MasterCard is expected to appeal the Commission's decision.