(Adds European Commission reaction)

By Huw Jones

BRUSSELS, Jan 20 (Reuters) - Visa Europe expects to reach a deal with European Union competition authorities on its cross-border transaction fees this year, the payment card company said on Tuesday.

Retailers are angry at having to pay the so-called interchange fee on each cross-border credit card transaction and complained to the EU's executive European Commission, saying the fee was a tax on consumption.

EU Competition Commissioner Neelie Kroes has already forced rival MasterCard to reform its interchange fee, a move the payment company is challenging in the bloc's top court.

Visa Europe has been negotiating with Kroes over its cross-border interchange fees on credit cards since the MasterCard decision at the end of 2007.

"We want to agree a model and level of interchange that can be applied consistently across Europe," Visa Europe's CEO Peter Ayliffe told reporters.

Ayliffe said dialogue with Kroes was "very constructive" and he expected a deal to be concluded "as soon as possible" this year. Visa's interchange fee of 0.7 percent remains for now.

The European Commission said it had an on-going antitrust case against Visa and could not prejudge the outcome of that investigation.