EU Warns of Need for More Credit Card Competition

by Mike Bevel, CollectionIndustry.com

According to Reuters, Charlie McCreevy, the European Union’s top financial market regulator warned on Monday that he may take action to increase competition in credit cards.

“I am in close contact with my colleague [EU Competition Commissioner] Neelie Kroes on this issue and I can assure you that the subject is also being very closely followed by national competition authorities,” McCreevy told a financial industry conference.

“Let me be clear: if there is abuse in the cards market then we have the instruments to intervene and we shall not hesitate to make use of our powers,” McCreevy said.

“We therefore welcome alliances and cooperation that can produce more competition,” he added.

The comments by McCreevy come on the eve of closed hearings alleging that MasterCard damaged competition by setting minimum fees for banks to charge businesses for using its cards. The European Commission is considering abolition of the fees.

McCreevy urged EU states to reach a deal with the European Parliament.

“We all need to move, and move rapidly right now, from principled discussion for each, to an honourable compromise for all,” McCreevy said.

“It would be disastrous if member states would let industry and consumers down because they defend narrow national interests or cannot agree on a sensible and proportionate prudential framework for payment institutions,” McCreevy added.

There also needed to be commitment among governments to use the new SEPA system so that national systems can be phased out on time, McCreevy said.