What is it that's lead to a number of announcements on payment networks in the past week? We had some of the EU countries pledging to implement an card payment network to take on Visa, MasterCard and Amex. China already has a payment scheme running. China's
lone inter-bank transfer network—China UnionPay—was founded five years ago and is accepted in 27 countries. China UnionPay has a membership of over 195 banks and non-bank financial institutions. A majority of the cash cards issued in China, around 1.3 billion
cards so far is under this brand.
Not to be outdone, India has announced that 'IndiaPay' is going to start operations in a month. IndiaPay is billed as the country's homegrown answer to Visa & MasterCard.
We have also seen the odd 'alternative' payment channels like Revolution Money and PayFair making announcements of offering an alternative to the big boys - Visa and MasterCard. Discover made a surprising move and gobbled up geriatric Diners Club.
So, why the rush? Simple, in our credit crisis times, payment networks offer a fantastic revenue option; low risk and tremendous potential to offer low costs. Merchants and Issuers are keen to enhance revenue and lower costs. Regulators will be happy to
see some home grown competition. These 'national' card schemes can garner a considerable chunk of credit, debit and ATM transactions now going through Visa and MasterCard. Clearly, paying authorization and transaction fees to Visa and MC is something the banks
are looking to get out of.
Watch this space, this is the next battleground. The battle cries are already out!