The 185-page
report, based on responses from many market participants, reveals
several potential barriers to entry into payment card markets, such
as technical obstacles and practices by banks and networks that may
raise costs for entrants.
A total of 23 billion card payments are made annually in the EU
with an overall value of €1.35 billion. The report found that
consumers pay 100% more for MasterCard and Visa in some countries
than in others. The fees for businesses vary by up to 500% across
the EU for Visa and up to 650% for MasterCard.
It also says that card acceptance fees are used to 'tax' sales
at business outlets, as banks charge retailers a fee for every use
of a payment card. This leads to inflated retail prices by up to
2.5% of total consumer purchases and aggravates the effects of
rigid market structures.
Small and medium enterprises pay higher fees than large ones for
the use of a payment card. These differences amount to more than
70% and do not seem to be justified by transaction costs.
The industry, consumers and other interested parties have until
21st June to submit their views and comments on the preliminary
findings. If the preliminary findings on payment cards are borne
out by this consultation, the Commission says it will consider
action under EC Treaty antitrust rules in individual cases.
In addition, the results of the sector inquiry will feed into
the Commission’s analysis of whether amendments to the regulatory
framework for payment cards are necessary. The Commission will
publish in July a report on the second part of its retail banking
inquiry – focusing on current accounts and financing of small
firms.
Competition Commissioner Neelie Kroes said: “The payment cards
industry in Europe remains national and some local players are
preventing competition from developing. This pushes up payment card
costs for consumers and businesses. Competition law and sector
regulation must work together to create a better environment for
business.”
Despite the existence of internationally accepted payment cards,
historic reasons and barriers to entry mean that much of the
industry operates on a purely national basis, with 25 separate
markets in the EU.
The Commission believes that a more integrated and competitive
payment card industry could create significant efficiencies for
businesses, boost competitiveness and innovation and raise consumer
welfare by delivering better services at lower prices. Making all
forms of cross-border payments, including payment cards, as easy
and affordable as domestic payments could save the EU economy
between €50 and €100 billion per year, it suggests.
