Saturday, March 31, 2007

Belgians reconsider rolling out Maestro for domestic payments

The Belgian newspapers all cover the news that, contrary to earlier reports and choices, the Belgian banks have chosen not to move over to Maestro as of 1.1.2008, for national Point-of-Sale payments. Their argument is that the European policy framework for payments is a bit unclear and also that merchants and domestic stakeholders were not really in favour of the idea. This very much looks as a victory for retailers, who have been sounding the alarm bell all over Europe that moving to SEPA may mean higher costs/fees for merchants.

Well, how should we read this stuff about an unclear policy framework? The Sepa Card framework is indeed a bit vague, but generally the idea to converge to panEuropean card payments is quite clear. So what would be the real issue here?

My guess is that it's not only the merchants voice, but also the uncertainty and threats of local and EU governments as to interchange fees for card payments, that is now making market developments come to a temporary standstill. The main issue is whether all brave and tough speeches by cartel-busters are merely gallery-play fr the public or a reflection of a serious determination to end interchange fees in Europe. And at present there is a formal complaint pending with the Belgian competition authority as to the Belgian move to Maestro. So given this uncertainty it may indeed be wiser for Belgian banks to adopt a wait-and-see approach to the issue, rather than moving ahead towards a scheme which will then be subject to further competition-reviews by regulators.