Why is it that the EC has such a problem with the card associations over cross-border fees, and interchange generally? What do they think is going to happen when these organisations find that doing business in the EU is simply too unprofitable?
Surely, the fact that we have two large (and one smaller) associations competing for business means that there is competition. If the fees are similar, then that is because neither dare stray too far from the other, for fear of losing business - that's
what competition does over time.
If the EU thinks that it is a success to either stop fees, or reduce them to the level where providing the service is a loss maker, then they (and we) will find that the service either becomes unavailable, or unreliable, as costs are cut to suit.
Part of the argument against the fees is that they diminish competition. Not really; the cost charged by the associations to the banks is a base cost that the banks must take into account. This is one cost amongst many that an acquirer must take into account
when determining their own price (the MSC), just like the cost of people, IT, utilities, premises, etc. also have to be taken into account - not to mention the margin they want to make. There is plenty of scope within all that financial make-up to enable
healthy price competition between the financial companies that provide acquiring services. The Associations have to be able to not only cover their costs but also make profits that they can use to develop their services and infrastructure further, and deliver
a return to their shareholders. If they don't, maybe they will withdraw their services, which will help no-one. At the end of the day, if the charges got too oppressive, one of the associations would probably see the opportunity to build market share and
the price would come down - that's what happens in a healthy competitive situation.
I don't think those in the EU responsible for harrassing the associations understand all this.
In any case, the EU itself is a huge monopoly. We don't get much say in whether we want to pay for the overbearing dictatorship that is the Commission, and we certainly are not getting the ability to regulate the obscene expenses that they claim. Maybe
they should allow competition to emerge in how we are governed - even some kind of proper democratic say would be nice...
Talk about kettle calling pot black.