The regulators have insisted that one or more local European card schemes compete with international players –especially Visa Europe and MasterCard. Monnet, together with two other initiatives EAPS and Payfair, has been formed as a result.
Three years in the making, the Monnet banking consortium now comprises 24 banks from seven European countries. The proposed scheme would establish an alternative to the Visa/MasterCard duopoly for cross-border card payments in Europe.
Banks backing the project, claim that the Monnet card scheme would be the ideal innovation vehicle for new services such as e-payments, m-payments and contactless payments, for all European cardholders.After a seven-month feasibility study, participating banks say they are now ready to launch the Monnet card, but only under certain conditions. Georges Pauget, chairman of the Monnet project, says uncertainty regarding MIFs remains the main obstacle to bank investment.
The MIF remains the key component of the business models of a card scheme, whether it is Visa Europe/MasterCard or a new local player. The regulators have said that the MIF set by international card schemes are too high and have been pressuring to lower the fees. As a result, both Visa Europe and MasterCard have lowered some of their cross-border interchanges, especially on debit cards, to be lower than 0.2 percent. A comprehensive overview covering the latest developments in the European card market will be provided in Mercator’s upcoming report European Card Market 2011 Update.
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