Saturday, May 12, 2007

EU banks in secret debit card talks..... but why would that make sense

A Reuters message outlines that EU banks supposedly are in secret debit card talks. Meaning that a third scheme would be born for EU-use in particular. The source is a document from Laffety Group which states that the banks are "believed to be unhappy with the possible emergence of MasterCard's Maestro as the dominant provider of debit card network services in Europe. The banks involved include Societe Generale, Deutsche Bank, Dresdner Bank, Commerzbank, Unicredito, ABN AMRO, ING, and Rabobank.

The main concern is that having two schemes is around would be insufficient for competition.... but why and how a third scheme would solve this is not clear. If we look at for example the situation in Australia. There used to be a bank credit-card scheme. But with international schemes coming in (also offered by those banks to allow their customers usage abroad and such) the bank card was in less demand than the international card schemes. Which is what will happen in Europe with this supposedly new scheme as well of course.

Imagine that a number of banks set up a EU-brand.. how are they gonna get that brand to work in the rest of the world? It is hard to figure out why this EU-brand would be preferred in Europes countries. Customers are increasingly travelling and mobile all over the world, so what would be the use of trying to build this third EU brand for EU-use. This would only work if the ambition and investment would go so far to completely replace one of the two brands internationally...

Which would be a silly ambition because in that case, this third EU-bred brand is a triplication of previous scheme efforts. So all in all, this doesn't make a lot of sense, other than that it might help a bit in the negotiations of EU-banks with Visa and Mastercard.