EU moves to integrate online, mobile, card payments


The European Commission has moved to further integrate the 27-nation market for card, internet and mobile payments and stave off a lack of competition in that business.

Published jointly by Internal Market Commissioner Michel Barnier and Competition Commissioner Joaquín Almunia, the consultation paper – or so-called Green Paper – also aims to boost transparency, innovation and security in the single market.

Of the €59-billion worth of total retail payments made in the eurozone during 2009, there was very little integration across member states and platforms of payment, the Commission claims.

No viable business model yet agreed

The EU executive wants to rationalise the market and increase the playing field for new entrants.

The amount of online shopping in Europe accounted for €141 million in 2009 and is expected to rise to €190 million by 2014, the Green Paper says.

The move is being launched in parallel with today’s publication of a communication on e-commerce, geared to double the volume of online trade by 2015.

"The key market actors – mobile network operators, payment service providers, mobile phone manufacturers – have not yet agreed on a viable business model enabling interoperable payment solutions," the paper says.

It cites a "stalemate between mobile network operators (MNOs), traditional payment service providers (banks) and 'e-players', such as Google, Apple or RIM [Blackberry]," with MNOs "seeking to retain control of the business, at least in their role of security manager for the service."

Move complements single-payment area, e-commerce initiative

The paper warns there is a serious risk of “fragmentation through proprietary solutions”.

The Commission has been following with interest the battle between Google and Visa, which have both stepped up their offers of "digital wallet" services. The struggle to control the emerging mobile payments market took a new turn in May 2011 when Google launched its eWallet application for smartphones, in partnership with MasterCard.

Another issue flagged in the EU consultation document is the security of online and mobile payment systems.

Sensitive customer information should stay within a secure payment infrastructure, both in terms of processing and storing data, according to the EU executive.

Stakeholders have until 11 April to reply to the consultation document. The paper is also designed to complement the roadmap for rolling out the Single Euro Payment Area (SEPA) which will replace 32 separate payment regimes with a single one, enabling faster and cheaper cross-border payments throughout the EU.

“Europe has an opportunity to be at the cutting edge of what ‘making a payment’ could mean in the future. However, we will not be able to reach this goal with the current level of market fragmentation,” said Internal Market and Services Commissioner Michel Barnier.

“Secure, efficient, competitive and innovative electronic payments are crucial for consumers, retailers and companies to fully enjoy the benefits of the single market as well as to drive the growth of e-commerce. The consultation we are launching today is fully in line with the Commission's mandate focusing on growth and job creation and building on the achievements already made in the field of retail payments,” Barnier said.

"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,” Competition Commissioner and Vice President Joaquín Almunia said.

“Europe's consumers, merchants and companies deserve payment services in tune with the 21st century: transparent, with genuine value-added and making the best use of our technologies."

The Payment Services Directive (PSD), adopted in 2007, aims to create a true European market for payments that would ideally lower the costs for both consumers and businesses (see EURACTIV LinksDossier).

Under the directive, payments are no longer reliant on an account held in a specific bank and can be made through a new series of different channels, like utility companies or mobile phone operators. 

The PSD was accompanied by an overhaul of the eMoney directive, which enabled cash to be stored on payment cards, mobile phones or on an internet account.

  • 11 April 2012: end of the consultation period on the Green Paper
  • Second quarter 2012: Commission to announce next steps
  • Last quarter 2012/First quarter 2013: Commission to put forward legislative proposal accompanied by impact assessment report

Subscribe to our newsletters