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PR(07)27: The EFTA Surveillance Authority publishes its interim report on card payments in the EFTA States


The EFTA Surveillance Authority has today published its Report on the preliminary findings of its sector inquiry into the card payments markets in the three EFTA States (Iceland, Liechtenstein and Norway). This Report constitutes the first phase in the Authority’s inquiry into the retail financial services markets in the EFTA States, phase two being an examination of retail banking products.

The Authority launched the sector inquiry into competition in the financial services markets of the EFTA States on 22 June 2005 (see PR(05)20). The sector inquiry corresponds to a similar exercise by the European Commission, which published a final report of its findings in January 2007. Together, the conclusions of the Authority and the Commission will provide an overview of the competitiveness of the retail financial services markets in the whole of the EEA.

Cashless money transactions using payment cards constitute an increasingly important part of the modern European economy. However, there are indications that payment card markets are fragmented along national lines and consumers in the EEA thus do not benefit from a single, integrated market with regard to card payment services.

The Authority’s inquiry confirms that card payment markets essentially operate on a national level and that there are significant differences in fee levels between countries within the EEA, both as regards cardholder fees and costs that are borne, directly or indirectly, by merchants accepting payment cards.

The inquiry found indications that overall, the payment card business enjoys considerable profitability. Card issuing (the issuing of payment cards by a bank to its customers) appears to be more profitable than acquiring (recruiting merchants for payment card acceptance and transmitting the cardholder´s payment back to them).

The Authority also examined market characteristics in order to identify actual and potential barriers to competition. In some markets, particularly those for acquiring merchants, there is a high degree of concentration with typically only a handful of market players offering their services in a given country. Moreover, market entry can often be rendered difficult by membership and governance rules set by a particular card scheme.

The publication of this Preliminary Report opens a consultation period, during which the Authority invites comments from public authorities, the industry, customers and third parties. Comments are requested before 20 September 2007.

Following the receipt of comments, the Authority envisages to publish a final report on retail financial services in the EFTA States towards the end of year 2007. On the basis of that document, the Authority will evaluate whether there are grounds for further actions on its behalf in order to address competition problems identified in the report.

For further information, please contact:

Mr. Hrafnkell Óskarsson
Senior Officer, Competition & State Aid Directorate
Tel. (+32)(0)2 286 18 55; or

Mr. Kjell-Arild Rein
Temporary Officer, Competition & State Aid Directorate
Tel. (+32)(0)2 286 18 86

  28 June 2007

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