Card Schemes Feature As EU Looks For Help Investigating Online Payments

July 10, 2023
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The European Commission’s influential directorate-general for competition (DG COMP) has released a procurement contract for an online payments market study just days after new payments legislation was proposed.

The European Commission’s influential directorate-general for competition (DG COMP) has released a procurement contract for an online payments market study just days after new payments legislation was proposed.

The European Commission has released a new procurement to assist it with market analysis on the role of bigtech in payments.

According to the commission, the main objective of this new study will be to assist the regulatory authority in enforcing competition law in online payments services and to identify tools helping to “prevent this market from tipping in the future in favour of Big Tech or incumbents”.

The study will examine the main online payment methods. including various types of mobile wallets, instant payments, cards and payment initiation service providers. and analyse likely scenarios regarding the use of traditional cards for online payments compared with digital wallets and direct bank transfers.

“The rapid evolution of payment methods for online payments requires up-to-date knowledge about the technical aspects of the new payment methods and access to data describing the sector evolution,” DG COMP says.

DG COMP further explains that although there is a number of specialised new payment operators with a significant online presence, like PayPal and Klarna, bigtechs and international card schemes (ICS) exert a significant and growing influence in online payments and, at the same time, large online merchants may exercise countervailing buyer power.

The commission sets out that the contractor’s analysis will cover at least Visa and Mastercard, as well as Google Pay, Apple Pay, Samsung Pay and PayPal, and market-specific operators such as Swish and iDEAL.

Bigtech issues were not prominently featured in the latest legislative package, with one source telling VIXIO that the European Commission has “kicked the can down the road”.

But it seems this may not have been kicked too far.

Another insider told VIXIO that they were sceptical about what else DG COMP could achieve with this study.

For example, competition issues are already addressed in the EU’s Digital Markets Act (DMA).

In the DMA, for example, so-called gatekeepers, including Apple, will be unable to force businesses and consumers to use their in-app payment system.

Potential consultancies have until September 18 to submit their tender.

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