EU Weighs Rules to Spur Competition in Payments Industry
European Union regulators may draft new rules for the payments industry by next year to tackle possible obstacles to competition.
The European Commission is seeking views on potential problems in the market for payments made via cards, the Internet and mobile phones, it said in an e-mailed statement today.
“Inefficient payments systems within the European Union unduly raise transaction costs, undermine the global competitiveness of the European economy and limit its potential for growth,” EU Competition Commissioner Joaquin Almunia said in the statement.
The EU is seeking to boost payments by mobile phones and the Internet as other regions take the lead in services, attracting investments from companies including Google Inc. (GOOG), Apple Inc. (AAPL) and Visa Inc. (V) The Brussels-based commission is already investigating whether a group of banks shut out a rival payment provider from talks to create standards for online payments. This follows earlier probes into Visa Europe and MasterCard Inc. (MA) into the fees they charge on card payments made outside a user’s home country.
Regulators said they will decide by the middle of this year whether new rules are necessary and, if so, may follow up by publishing draft rules in late 2012 or early 2013.
‘Too Slow’
EU antitrust action to crack down on card fees is “proving too slow in the short term” and may “leave too much scope for workarounds in the long term,” EuroCommerce, an association representing the region’s retailers, said in an e-mailed statement.
“A payment is a service for which a fair, competition- based fee should be charged, not a profit mechanism for the banking sector,” EuroCommerce said.
The commission is considering allowing retailers across the EU to impose surcharges on consumers who use payment cards with relatively high fees, Michel Barnier, the EU’s financial services chief, told reporters. Such surcharging is currently banned in some countries.
Any surcharges would have to be strictly limited to covering the cost of card fees, the commission said.
The commission’s position was opposed by Visa Europe, which said in a statement that the EU should seek “an end to surcharging.”
The commission, the EU’s executive arm, is responsible for proposing legislation that covers the 27-nation region. It’s also the region’s competition authority.
“The payments sector needs to have a sustainable business model to fund innovations that will keep Europe ahead of the rest of the world,” MasterCard said in a statement.
Regulators separately pledged to boost the sale of goods and services on the Internet in the bloc by examining possible problems with online payments and parcel deliveries as well as bolstering consumer protection for online purchases.
To contact the reporters on this story: Aoife White in Brussels at awhite62@bloomberg.net. Jim Brunsden in Brussels at jbrunsden@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.
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