Thirty European banks, including Deutsche Bank AG and BNP Paribas SA, reportedly are pushing ahead with plans to create a debit card system in Europe that would compete against debit networks operated by Visa Europe and MasterCard Worldwide.
According to Bloomberg News, the banks, representing more than 10 countries, agreed at a meeting held in Madrid May 5 to extend the project across Europe, according to Deutsche Bank.
The banks will decide by the end of this year whether they will participate in the payment system, called Monnet, after further studies.
Monnet, which is named after a 20th-century French economist who was a key proponent of European unity, initially gained momentum last year when Deutsche Bank CEO Hermann-Josef Lamberti said the system was an investment in innovation and in the independency of the European banks (
The European Central Bank and the region’s lenders are seeking to create a third pan-European debit system as an alternative to MasterCard’s Maestro and Visa’s V Pay. Monnet is designed to compete against a “duopoly of the two international card companies,” according to one board member of the Deutsche Bundesbank, Germany's central bank.
Deutsche Bank and BNP executives were unavailable for comment.
Other European banks have discussed creating a debit card system separate from Monnet.
Belgian retailer Colruyt Group tested the Payfair debit card at about five stores in October, with a broader rollout expected in 2010.
“We have several million cards to be issued potentially,” Dominque Buysschaert, chief executive of European Payment Solutions, a Belgian transaction processor involved in the Payfair project, said last year.
Buysschaert and other payments executives have said they hope to offer merchants and consumers across the Continent cheaper ways to pay, without depending on companies with origins in the United States.
Another proposal is designed to unite some of Europe’s numerous national debit networks (a Deutsche Bank spokesperson says more than 18 exist). The Euro Alliance of Payment Schemes expects to handle cross-border debit transactions in Europe, including card and ATM transactions, from Germany, Portugal, Italy and the United Kingdom, among others. Alliance officials have said they hope the group becomes Europe's largest card-acceptance network by 2015.
The Monnet scheme appears to have support from national regulators, according to Terry Xie, director of the international advisory board for Mercator Advistory Group. “It’s also interesting to note that, according to a top official at the French Banking Federation, that compared to MasterCard and Visa, Monnet is positioned as a non-profit-driven card scheme in order to provide a neutral solution to the market,” Xie wrote in a February research note.
Monnet’s future largely will depend on its ability to move quickly and get as much support from the pan-European banking industry as possible, Xie wrote. That may be a challenge because banks are still dealing with the global financial crisis.
“Setting up a new pan-European card scheme might not stand high on banks’ priority list when it comes to allocating limited resources,” Xie wrote.
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