The EPC acts as the coordination and decision-making body of the European banking industry for payments. It works for its members - major banks such as Barclays, BNP Paribus and HSBC - to help build an integrated European payments market through Sepa.

The Commission says it supports Sepa and recognises the importance of standardisation in promoting economic integration. However, following a complaint, it will now look in to whether the standardisation process for e-payments is locking out new entrants.

Its investigation is to make sure "competition is not unduly restricted, for example through the exclusion of new entrants and payment providers who are not controlled by a bank". Such restrictions would lead to higher prices for Web merchants and ultimately consumers, says the EC.

Joaquín Almunia Commission, VP in charge of competition policy, EC, says: "Use of the Internet is increasing rapidly making the need for secure and efficient online payment solutions in the whole Single Euro Payments Area all the more pressing. I therefore welcome the work of the European Payments Council to develop standards in this area. In principle, standards promote inter-operability and competition, but we need to ensure that the standardisation process does not unnecessarily restrict opportunities for non-participants."

Responding to the news, Gerard Hartsink, chair, EPC, says: "The EPC is continuously providing full and transparent information available to all stakeholders, including the European Commission, on the EPC's activities in the area of online payments. To-date, related work remains in progress and no final documentation has been published. The EPC therefore does not support the allegations by DG Competition that the EPC's work in this area could potentially discriminate against new market entrants or other service providers."