| Contacts |
| Louise Herbert MasterCard Worldwide +32 (0)2 352 5647 |
| Sam Rowe Weber Shandwick +32 (0)2 240 9788 |
MasterCard Europe’s Statement on the European Commission’s Final Report on the Retail Banking Inquiry
Report leaves uncertainty for Single Euro Payments Area
Clear green light needed from the Commission on interchange to achieve SEPA
While this is a softening compared to previous reports, statements made today by European Commissioner Neelie Kroes still leave the interchange fee in a cloud of uncertainty that could deter further investment in SEPA initiatives.
As the industry is facing the 1 January 2008 deadline for the implementation of SEPA, what we need is a clear green light from the European Commission, and not a yellow on the interchange issue.
Continued uncertainty could slow down the replacement of cash, which is more expensive, less convenient and less secure than cards. This goes against the European Union’s ambition of creating a harmonized and efficient European market for payments.
Interchange is pre-requisite to SEPA
Interchange fees provide the basis for a balanced pan-European payment scheme by allocating costs in a transparent manner among all participants in the payment scheme. The announcement by MasterCard Europe of its fallback Maestro rates late last year was an important step towards moving SEPA forward.
Banks may hesitate to continue to invest in SEPA while the European Commission debates what to do with interchange fees. While the European Commission still seems to believe that interchange fees should be reduced significantly, it is overlooking that zero or low-interchange fee schemes are often based on price regulation, cross-subsidization or operating losses. Most importantly, these schemes do not deliver the competition throughout the value chain that SEPA aims to achieve.
Fostering a competitive payments landscape
Consumers and business deserve to benefit from the well-developed and highly efficient payment services that SEPA would bring. The European Commission should therefore carefully consider the impact of its initiatives and the potential damage they can cause to the further development of SEPA.
MasterCard Europe is very much part of the solution to a whole range of issues identified in today’s report. The European Commission’s focus should now be on creating a competitive European payments landscape and on fulfilling the Lisbon objectives to make Europe a leading economy by 2010.
We look forward to continuing the constructive dialogue with the European Commission and other stakeholders on the issues covered by the report, to make sure that SEPA becomes a reality by 1 January 2008.
About MasterCard Europe
MasterCard Europe is the entity responsible for managing MasterCard Worldwide’s business in Europe - for Europe. With headquarters in Waterloo, Belgium, MasterCard Europe works with 51 European countries organized administratively into three customer areas, incorporating the Single Euro Payments Area (SEPA), mature markets and the developing markets of Europe, stretching as far afield as the eastern border of Russia. Through its network of local offices, MasterCard Europe can understand and meet the diverse needs of customers in the very different types of markets throughout Europe, enabling people to do business in their own way in their own language.Through MasterCard Worldwide, MasterCard Europe offers its European customers and consumers access to leading payment services throughout the world. MasterCard advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 14 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard Worldwide serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercardworldwide.com.