According to a preliminary report into the payment card industry published on 12 April 2006 by DG Competition, the sector is in breach of EU antitrust rules.
“The payment cards industry in Europe remains national and some local players are preventing competition from developing”, said Competition Commissioner Neelie Kroes.
The report identifies large price differences as one of the main problems. In some EU countries, consumers pay 100 % more for Visa and MasterCard services than in other countries. Business charges can vary across the EU-25 with up to 500 % for Visa and 650 % for MasterCard. Furthermore, SMEs pay up to 70 % more for the use of payment cards than large companies. These findings plus high profits of € 1.35 trillion in 2004 by the payment card industry raise the Commission’s concern that these markets are not yet competitive.
Furthermore, the report reveals several structural, technical and behavioral barriers to market entry such as different technical standards within the EU, which prevent service providers to operate on a European scale, banks dealing jointly with retailers, instead of competing or agreements between local banks, whereby costs for new entrants may increase.
According to the Commission, the EU economy could save between € 50 and € 100 billion per year, if the payment card industry were more integrated and competitive and cross-border payments as easy as national ones.