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EU pushes for alternative to Visa and MasterCard

19 September 2008 13:47 (UTC +04:00)

Baku. Vugar Mustafayev - APA-Economics. Leading French and German banks began talks with the European Commission at the beginning of 2008 on how to establish a new payment scheme in Europe that would compete with American firms Visa and MasterCard.
The European Central Bank (ECB), which has a strong influence on payment systems within the EU, supported the Commission by speaking out in favour of a new truly European system last week during the Eurofi conference in Nice, one of the main financial services meetings of the year.
"Visa and Mastercard are not enough," stated Jean-Michel Godeffroy, director general for payment systems at the ECB, adding that more competition in the European payment market is needed.
The Commission has always maintained a hard line against MIFs - particularly in relation to American-run payment card activities - arguing that they unfairly penalise consumers. MasterCard has been threatened with fines because of the fees it charges, while Visa is awaiting a new decision by the Commission following the expiry of an exemption period it had been granted at the beginning of 2008
In the meantime, European banks launched the first phase of the Single Euro(pean) Payments Area (SEPA) to extend the opportunities offered by the common European currency to electronic and non-cash payments. At the moment, such cross-border transactions are only possible in Europe under a range of different national schemes, which makes them more complicated and less reliable.