Wednesday, June 20, 2007

European banks agree crossborder Mastercard rival |

See the article here that outlines that European banks have agreed to link their national debit card systems from September in a bid to break Mastercard's grip on crossborder payments, a German banking official said on Wednesday.

On Sept. 4 banks will launch a scheme, called EAPS, to enable debit cards issued in Germany, Britain, Italy, Spain, Portugal and Austria to work in cash machines and shops in the other countries, Peter Blatsche from German public-sector banking association VOeB said. For debit cards to work outside their country of issue, they currently need to be part of either Mastercard's dominant Maestro scheme or V-Pay operated by Visa Europe.

The pricing of the Euro Alliance of Payment Schemes (EAPS) scheme will be no more than the 0.3 percent rate changed under Germany's Electronic Cash debit card system, Blatsche said.

This will be a sort of 'good news' for the worried central banks (see my earlier post here) who have for unknown reasons decided to find themselves responsible for competition in the market rather than maintaining the European interest rate.