Last week I noted that members of Dutch parliament (quite obviously prompted by retailer-lobby organisations) started asking questions in parliament on the competition in payments and on the possibilities of price increase as a result of SEPA. Which showed that retailers succeeded quite easily in (hijacking and) narrowing down complex policy discussions about European payments markets into an ordinary Dutch price-rebate discussion for merchants.
This week the retailers continue their battle in the Financieele Dagblad. Mr van der Broek, chairman of all retailers in the Netherlands explained in an interview that the retailer representative organisations withdrew from some subgroups of the socalled National forum on payment systems that dealt with SEPA. The reason for doing so was that the retailers found it unacceptable that the banks did not collectively wish to give a low price guarantee for future fees of payments authorisation. Not receiving any affirmative response, they concluded that it was most likely that further price hikes were upcoming and that in the end there would only be two acquirers in Europe: Visa and Mastercard; which would have to mean higher fees for everyone.
This oversimplification of reality did not go by without a comment of the Dutch banks. On their website they have provided a somewhat cool reply. In this news posting (in Dutch) they point out that the claim and fear for a duopoly in the cards market rests on the misunderstanding that retailers have direct contracts with scheme-owners rather than with all the players (banks and non-banks alike) in the acquiring market. So the duopoly is nowhere near in sight and will never become a reality.
They further continue - as a part of their explanation of the six most common misunderstandings about POS-authorisation fees- that already at this very moment retailers can choose from a wide number of banks and acquirers for pos-authorisation processing. And research by the Dutch competition authority demonstrates that this competition works and leads to lower fees.
In their statement the banks also politely hint at the oddness of the retailers price guarantee question, by explaining that it is forbidden as a collective of banks to do joint price setting. And that it is not proper conduct to asks banks to committ to such behaviour nor to draw conclusions from the fact that banks do not answer to this question that shouldn't even be asked in the first place. They point out that it even more incorrect to assume that the silence in reply to this question thus means that fees will become higher.
My personal viewpoint is less polite. Some 5 years ago, the retailers were among the loudest bunch in the audience to want the existing price-cartel/monopoly of banks (for authorisation of PIN-transactions) to be eliminated. And they were right in doing so. They got exactly what they wanted: banks were fined and all contracts now need to be bargained by retailers at individual banks. Retailers even got one cent discount as a part of a separate agreement with banks to set the past aside and work towards efficient payments in the future. So they dismantled the existing monopoly in exhange for competition. But instead of competition the retailers now appear to want a Dutch domestic bank monopoly back to fix or set some even lower prices for the future.
On their website, the Dutch banks once more outline that SEPA is not a banking party but the result of political pressure on banks (Lissabon agreement in 2000), leading to standardisation by the European Payment Council on the one hand and to legislation (Payment Service Directive) on the other hand. So the banks reject the retailer suggestions that SEPA is brought on the public because the banks want this so much. The banks also ask retailers to join in and do their bit: accept all panEuropean payment brands so that all Europeans may be able to pay efficiently at the point of sale.
And finally the banks point out that irrelevance of the whole issue brought forward by the retailers. They clarify that in the Netherlands it is possible to surcharge at the point of sale. So the retailer can choose to ask a fee from the consumer if a certain payment brand (or cash !) is a bit costly. Which would solve the whole problem of bank fees in the first place.
And with that last explanation comes another fine example of interesting retailer behaviour. The banks outline that 25 % of the Dutch retailers ask a 25 eurocent fee from the consumer if he chooses to use the direct debit card over other payment instruments for low value payments. While the bank fee for this transaction is only 5 cents, this does raise an additional question as to why retailers so heavily overcharge the consumer. It can't really all be 20 cents for terminal or telecommunication cost...
