German and French banks push ahead with new debit card scheme

German and French banks push ahead with new debit card scheme

German and French banks, including Deutsche Bank and Societe Generale, have stepped up efforts to create a new European debit card scheme to challenge MasterCard and Visa.

The European Central Bank has been calling on the industry to set up a rival scheme to challenge the dominance of MasterCard's Maestro and Visa's V Pay in the Single Euro Payments Area (Sepa), for two years.

Last week at EBAday the ECB's Wiebe Ruttenberg, reiterated the stance, telling delegates: "We need at least one alternative card scheme in Europe to become a credible challenge to the duopoly."

However, there has been reticence on the part of banks to commit to a scheme because of uncertainty in the market surrounding interchange fees.

In April the EC hit Visa Europe with an interchange antitrust charge just days after reaching agreement with MasterCard on the same issue.

The proposed rival system now appears to have gained fresh impetus, with Deutsche Bank COO, Hermann-Josef Lamberti, telling a conference in Frankfurt that several financial institutions, including Societe Generale and BNP Paribas, will probably set up a group in September to push ahead with the scheme.

According to Bloomberg, Lamberti told the conference that once the rest of Europe saw that French and German banks agree on the plan, it "has a chance to evolve into a solid European system".

Bundesbank board member Hans Georg Fabritius told the conference that a Visa and MasterCard duopoly is "an unsatisfying vision" for political and economic reasons. However, he warned that while the French and German project, called Monnet, is "promising" it is only a concept and he would want other countries to join in.

Deutsche Bank, Lenders Push for New Debit-Card System - Bloomberg

Comments: (2)

A Finextra member
A Finextra member 10 July, 2009, 11:18Be the first to give this comment the thumbs up 0 likes

Visa and Mastercard were formed by banks and are operated for the benefit of the banks, not the cardholders. Asking another group of banks to form an alternative scheme will not address the problem. An alternative needs to be sought outside the current banking system. An interchange that is independant from the banks offering an alternative chrging structure, without the barriers for entry that the current interchanes have that benefits all the stakeholders involved, including the Merchants ands Cardholders

A Finextra member
A Finextra member 13 July, 2009, 07:03Be the first to give this comment the thumbs up 0 likes

Ahh... Project Monnet. Very good. Jean Monnet, the Chief Architect of European Unity. Having thought about this project for a moment, I wonder whether Claude Monet might have been a more appropriate inspiration? As the founder of French Impressionist painting, Monets style often used light to accentuate the effects of the passage of time on a subject. Given the time a 3rd card scheme might take to establish in Europe, Claude might have been preferable to Jean. Unless the objective of the banks involved just to create an impression or an illusion of unity?