Monday, April 21, 2008

EU's McCreevy tells payment card cos not to use SEPA as excuse for price rises

BRUSSELS (Thomson Financial) - EU internal market commissioner Charlie McCreevy said payment card providers must not use the single European payments area (SEPA) as an excuse to replace national card payment schemes with more expensive ones. In a speech in Dublin, McCreevy said there is 'justifiable concern' that greater functionality of payment cards could come at the cost of increased market concentration and a more expensive payment card for the merchant. 'At the heart of this issue is our concern that cheaper national card schemes should not be replaced by more expensive payment card schemes, using SEPA as a pretext,' he said. McCreevy also said that commission's plans to implement SEPA, and recent legal proceedings against Mastercard and Visa, called for banks to create a new European player in the industry. 'Of course, as regards the possible emergence of a genuine European scheme, I fully recognise that where banks are called upon to make fresh investment to create a new EU debit card player, clarity on possible business models and a possible MIF (multilateral interchange fee) that is compatible with EU competition law is crucial,' he added. Last December, the commission ruled that MasterCard (nyse: MA - news - people )'s interchange fee payments network within the European Economic Area (EEA) is illegal. McCreevy reiterated that whilst the decision was received with 'mixed feelings' by the banking industry, it did not conclude that all MIFs are illegal per se.

No comments: