On 31 January 2007, the Commission is to present a critical report on the European payment-card market, which may trigger individual anti-trust investigations.
According to EU sources, the report will echo the preliminary findings of the competition sector inquiry, published in April 2006. The findings suggest that markets are not yet competitive and several barriers to competition are in place.
The key critical points are the continuing fragmentation of the market along national lines, several barriers to market entry, as well as large price differences.
One of the main sticking points is the issue of “interchange”. The interchange fee is paid by the merchant’s bank to the cardholder’s bank at any point-of-sale transaction using a credit card, such as Visa or MasterCard.
Ahead of the Commission’s announcement, Visa Europe warned that a move to cut interchange fees could put the Commission’s plan for a European payments area at risk (EURACTIV 16/01/07). Visa Europe’s CEO Peter Ayliffe urged regulators to recognise “that interchange is essential for the management of payment systems”.
The European retail association EuroCommerce, said it was “looking forward to the final report of the sector inquiry”. It claims that interchange fees have been fixed to maximise the income of banks at the expense of retailers and their customers.