EC Investigates EPC for Shutting Non-Banks Out of European E-Payments Scheme

Sept. 29, 2011

The European Commission has launched a probe investigating whether the decision-making body for Europe’s banks is blocking non-bank providers from entering the online payments market. The European Payments Council and its major bank constituents are trying to set standards for e-payments throughout a proposed Single European Payments Area (SEPA), but the EC has received complaints that the EPC is locking out new entrants. “Use of the Internet is increasing rapidly, making the need for secure and efficient online payment solutions in the whole Single Euro Payments Area all the more pressing,” said Joaquín Almunia Commission, vice president in charge of competition policy for the EC. “I therefore welcome the work of the European Payments Council to develop standards in this area. In principle, standards promote inter-operability and competition, but we need to ensure that the standardization process does not unnecessarily restrict opportunities for non-participants.” According to the EC, the investigation is to make sure “competition is not unduly restricted, for example through the exclusion of new entrants and payment providers who are not controlled by a bank.” Gerard Hartsink, chair of the EPC, responded: “The EPC is continuously providing full and transparent information available to all stakeholders, including the European Commission, on the EPC’s activities in the area of online payments. To-date, related work remains in progress and no final documentation has been published. The EPC therefore does not support the allegations by DG Competition that the EPC’s work in this area could potentially discriminate against new market entrants or other service providers.”