The European Commission and the European Central Bank have welcomed a document published by the banking industry-backed European Payment Council that paves the way for a competitive single market for card payment card schemes by 2010.
The document, which takes the form of a Q&A, clarifies key aspects of compliance with the Sepa Cards Framework (SCF) for payment card schemes and banks, as well as the conditions for geographical coverage of card schemes within the Euro zone.
In particular, it rules that any national card scheme can be deemed to be compliant with the SCF if the cards it issues are technically and commercially capable of being accepted everywhere in the Sepa territory. Earlier interpretations of the Framework appeared to imply that a card scheme could only be deemed SCF-compliant if it covered all 31 Member states.
The ECB and Commission had expressed fears that such an interpretation would create a "de facto monopoly" for Mastercard's Maestro debit card system and had been encouraging banks to set up an alternative scheme in competition.
The ECB had become particularly concerned about moves by some banking associations to ditch domestic schemes in favour of internationally-accepted programmes by MasterCard and Visa.
The new guidance from the EPC clarifies the situation and makes it clear that the Sepa provisions for cards will allow many - possibly national and regional - schemes to develop into 'SCF compliant' schemes. Nonetheless, the Commission warns that work is still needed by the EPC to develop a full set of technical standards allowing any card to be used, for payments in euro, potentially anywhere in the Sepa area.
"This is a precondition for the expansion of existing domestic debit card schemes across the Sepa countries, for the emergence of (a) new European card scheme(s), for pan-European processing and certification, and for market consolidation," says the Commission in a statement.
"More competition would be very welcome," the Commission continues. "The success of new initiatives will depend crucially on banks not simply selling the national debit card scheme to the existing schemes."
The document, which takes the form of a Q&A, clarifies key aspects of compliance with the Sepa Cards Framework (SCF) for payment card schemes and banks, as well as the conditions for geographical coverage of card schemes within the Euro zone.
In particular, it rules that any national card scheme can be deemed to be compliant with the SCF if the cards it issues are technically and commercially capable of being accepted everywhere in the Sepa territory. Earlier interpretations of the Framework appeared to imply that a card scheme could only be deemed SCF-compliant if it covered all 31 Member states.
The ECB and Commission had expressed fears that such an interpretation would create a "de facto monopoly" for Mastercard's Maestro debit card system and had been encouraging banks to set up an alternative scheme in competition.
The ECB had become particularly concerned about moves by some banking associations to ditch domestic schemes in favour of internationally-accepted programmes by MasterCard and Visa.
The new guidance from the EPC clarifies the situation and makes it clear that the Sepa provisions for cards will allow many - possibly national and regional - schemes to develop into 'SCF compliant' schemes. Nonetheless, the Commission warns that work is still needed by the EPC to develop a full set of technical standards allowing any card to be used, for payments in euro, potentially anywhere in the Sepa area.
"This is a precondition for the expansion of existing domestic debit card schemes across the Sepa countries, for the emergence of (a) new European card scheme(s), for pan-European processing and certification, and for market consolidation," says the Commission in a statement.
"More competition would be very welcome," the Commission continues. "The success of new initiatives will depend crucially on banks not simply selling the national debit card scheme to the existing schemes."
The European Payment Council's Q&A.
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