ERU, Alm.del - 2011-12 - Bilag 242: Notat til Folketingets Europaudvalg om EU-Kommissionens høring vedrørende kort-, internet- og mobilbetalinger, fra erhvervs-, vækst- og eksportministeren

The Danish government welcomes the initiative by the European Com-mission to launch a broad consultation about the European market for card,internet and mobile payments.The Single Market is the largest home market in the world. However, thedigital single market still needs to be unleashed. Removing the existing bar-riers, and modernising the legislative ground rules, can give consumers andbusinesses in Europe access to the Single Market from their home computer,from the office and from their smart phone. The economic potential in com-pleting the digital single market amounts to up to 4 % of GDP or five hun-dred billion EURO1.The Danish Government attaches great importance to the removal of thebarriers that stand in the way of realising the potential of the Digital SingleMarket as this can serve to boost jobs and growth in Europe. E-commerce isto a large extent based on distance electronic payments and furthering tradevia the internet therefore necessitates efficient and safe payment systems inEurope.The Danish government therefore considers it appropriate that the EuropeanCommission undertakes a broad consultation with stakeholders in order tovalidate or contribute to the analysis of the market for card, internet and mo-bile payments. This will contribute to the identification of the right methodto improve market integration.The Danish government agrees there is a need to increase the market integra-tion in the area of payment instruments and generally welcomes initiativesthat promote the four factors (competition, transparency, innovation andpayment security) that can create a more efficient market for paymentswithin the European Union.The Danish government attaches great impor-tanceto ensuring infrastructure that can facilitate cheap and effective pay-ment.

Specific commentsSeparation of card schemes and processing of card payments(Green Paper section 4.1.4)Card schemes may have subsidiaries that process or handle the transac-tions. Other actors (acquirers or processors) may therefore be required touse these subsidiaries in the processing of transactions. This can consti-tute an entry barrier. Such vertical integration between a card scheme andits subsidiary may make it less attractive for other actors to establishthemselves in the market and compete against the subsidiary since theseactors cannot achieve economies of scale in the cost of transaction proc-essing as opposed to the subsidiary which is affiliated with or owned bythe card scheme. This can constitute a challenge to an integrated Euro-pean market.However, there might be economic benefits as a whole of vertically inte-grated companies in light of economies of scale in a payment system.Furthermore, the competition can instead be characterized by a system ofcompetition, meaning that the competition takes place between differentpayment systems rather than competition within the same payment sys-tem where the vertical integration takes place. This can still enable anappropriate competitive pressure in the payment market.The Danish government has no knowledge of the extent of the problem ofthese types of entry barriers within EU. With regard to Denmark thepayment service provider Nets is in practice the only collector of transac-tions in Denmark and all other processors (Swedbank, Valitor etc.) areobliged to use Nets for the processing of the transactions.The Danish government finds that initiatives such as open standards forinfrastructure and transaction processing may be appropriate in order topromote competition among payment service providers and thereby givealternative providers an easier access to the processing of transactions.Such initiatives may reduce entry barriers caused by card schemes havinga subsidiary that process the transactions.However taking into account that such measures will have a significantimpact on market operators there should be made a thorough and objec-tive analysis of the affected areas before any action is considered further.Access to settlement systems(Green Paper section 4.1.5.)The Danish government attaches great importance to the security in des-ignated settlement systems. It is therefore considered essential that theconsequences of providing direct access to designated settlement systemsare mapped and analyzed very carefully. In connection with any consid-eration of whether there should be access to designated settlement sys-tems for other than credit institutions and investment firms in accordance

with Article 2(b) of the settlement finality directive it is considered mostappropriate that if a thorough analysis should prove that these potentialnew participants are most likely to present a risk to the safety of the sys-tems this should be given greater weight than an expansion of the poten-tial participants of a settlement system to also include payment servicesand electronic money institutions.Compliance with the SCF (SEPA Cards Framework)(Green Paper section 4.1.6.)The European Payments council (EPC) has developed SCF in order tocreate common standards for payment cards. The SCF defines obligationsfor cards to be SEPA compliant. Card arrangements that do not meet theSCF common standards are at risk of disappearing.However, there should be focus on this area in order to avoid that theobligations of SCF will create an unequal relationship between domesticpayment cards and international payment cards, and prevent that domes-tic debit cards which are often efficient payment instruments will sud-denly disappear.Information on the availability of funds(Green Paper section 4.1.7)As regards the sharing of personal information such as the availability offunds on consumers bank accounts it is vital that the express consent isgiven by the consumer. It should be clear and transparent to the consumerat all stages, who can access the information and when- ensuring that aninformed choice can be made.The relationship between consumers and recipients(Green Paper section 4.2.2.)An appropriate manner to increase the use of efficient payment instru-ments is through the fees or discounts set by merchants in relation to theuse of different payment means.The Danish government finds that measures that can increase the optionand the incentives of the merchants to charge fees or offer discounts tomake consumers use the most effective and inexpensive means of pay-ment should be encouraged.It is a general principle that transparency enables competition and buildsconsumer confidence. As such it is important to find a reasonable solu-tion that does not needlessly confuse or obfuscate purchasing decisionsfor the consumers.The Danish government also considers that consumers are encouraged ina more effective way through fees and discounts than if the merchantsimply informs about the costs of the different payment instruments asstated in the Green paper section 4.2.1.

Since the use of payment instruments in the EU countries is still verydifferent it will be appropriate that the member states have a certain scopeof action to establish rules or actions that can be adapted to national cir-cumstances. This way the use of efficient payment instruments can beappropriately encouraged.The relationship between merchants and payment service providers(Green Paper section 4.2.3)Transparency in prices for different payment cards and the true cost ofaccepting cards can be increased by preventing the rules set by acquirersthat limit the opportunities of the merchants to set appropriate fees orrebates to difference payment means.This especially concerns theNo Discrimination Rule (NDR)where thepayment service providers (acquirers) may prevent merchants from en-couraging consumers to choose the cheapest payment cards, and theblending practices rulein which acquirers charge one price for all pay-ment cards irrespective of whether they are actually associated with dif-ferent costs. For example a “corporate card” is often more expensive toaccept than a “consumer card”, but if the acquirers charge the same pricefor both cards the merchants will have no incentive to steer consumerstowards the cheaper consumer cards.If the merchant had larger possibilities to steer consumers towards cheappayment instruments and the acquirers were required to offer paymentinstruments to accurate merchant service charges this would increase thepossibility of competitive pressures between card types and card compa-nies.Again it should be taken into account that the consumer should havetransparency in terms of costs of making payments in order make an in-formed decision the consumer has to be appropriately informed.