This very nice report by the Office of Fair Trade discusses the state of things in the UK with respect to competition in the retail payment industry. Quite a read, but some interesting remarks:
1.35 The costs of becoming a full settlement member of the clearing schemes are not trivial. However, the decentralised (fixed) costs associated with a member’s own infrastructure requirements are perhaps the most substantial barriers to direct access. Nevertheless, the requirement that these decentralised systems are made compatible with the legacy systems of existing members increases the costs of new membership, potentially discouraging entry.
1.37 The justification for preventing non-financial institutions from joining the clearing schemes, at least as recipients of payments, do not appear strong.
1.50 Participants have told the OFT that the continued existence of restrictions on access to card schemes is justified by the need to safeguard the security of the schemes. It is not clear, however, that the current restrictions place requirements on new members commensurate with the risks that those members would place on the schemes. We therefore view the continued existence of the restrictions to be a concern.
