04 June 2008

MLex: Banks seek solution to EC's payments network concerns

Europe's banks are seeking to address anti-trust concerns raised by the European Commission over the way they set standards for payments cards in a bid to avoid full-scale anti-trust action.

Europe's banks are seeking to address anti-trust concerns raised by the European Commission over the way they set standards for payments cards in a bid to avoid full-scale anti-trust action. The European Payments Council and the commission are conducting a series of meetings to rectify problems over governance, standards, card fees and migration plans to Europe-wide schemes in order to reach a consensual solution. 

 

The commission has long kept the payments industry in its sights but a complaint submitted earlier this year by retailers association Eurocommerce has once again pushed the sector to the fore, forcing banks and associations under the umbrella of the European Payments Council (EPC) to allay regulators' fears they may be colluding on managing the developments of payments in Europe. 

 

Representatives of the EPC and other banking associations met with DG Competition on 8 May to discuss a way forward and scope out the regulator's concerns, which emanate from the structure of the EPC itself: a loose coalition of associations which may result in conflicts of interest as well as locking out industry players who aren't fully-fledged banks. 

 

There are worries that standards agreed by the EPC for the functioning of cards schemes across the EU – aiming to make cards usable beyond national borders – may create foreclosure effects. There may also be further obstacles to market access for direct debits and credit transfers.

 

Questions have also been raised by the commission over the 'Multilateral Balancing Payment' (MBP), an inter-bank fee for processing direct debits. The commission is understood to have sought information on the payments model, the methodology and a cost-benefit analysis. 

 

The commission has vigorously pursued suspected anticompetitive practices in the payments industry in recent years with cases against Visa, MasterCard, Cartes Bancaires and a sectoral inquiry. This has all run in parallel to 'SEPA', a Europe-wide project to construct a single payments network to marry Europe's single currency.

 

But in the current case with the EPC, it seems dialogue with the commission and national authorities is the way forward – for the time being – to avoid yet more anti-trust activity in the sector. 

 

Meetings have been planned for early-June between the commission and representatives of the banks to address issues such as standards, access to schemes and infrastructures, and fees principles, in the hope of concluding talks before summer.

 

By Lewis Crofts

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