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Creating and generating large volumes for European-centric debit schemes designed to compete with those offered by MasterCard Worldwide and Visa Europe could take as long as a decade, Gwenn Bézard, research director and co-founder of United States-based consultancy Aite Group LLC, tells CardLine Global. German and French banks plan to create a company in October that would form the foundation of a debit card network called Monnet, according to recent comments from a Deutsche Bank executive (CardLine Global, 10 July). Meanwhile, another European-centered debit card brand, Payfair, is set for an October pilot in Belgian retail stores, with a rollout anticipated for 2010, according to an executive helping to guide that scheme (CardLine Global, 13 July). The moves come as European regulators, seeking to create a common market for electronic payments, pressure Visa and MasterCard to abandon certain interchange rates and other card practices deemed anticompetitive and as the continent's merchants increasingly complain about high card-acceptance costs. Because Deutsche Bank, Societe Generale and other major German and French banks are pushing for new card brands, "expectations are very high something will happen," Bézard says. He wonders, though, how much capital banks are prepared to invest in such schemes, especially given the global recession. "It could be very expensive in this economy," he says. Additionally, recent history does not suggest any alternative card networks will gain ground quickly. The drive to create the common market for electronic payments, the Single Euro Payments Area, faces delayed deadlines and sluggish progress. "You look at SEPA, it's been going for years," Bézard says. "So 10 years [for a new card scheme] is not unreasonable." Even with new competitors, Visa and MasterCard appear poised to retain the "upper hand" in the long run because they have brands "that [are] very strong .. and a lot of work [invested] to build strong networks," he adds. More than 300 million European payment cards carry the Maestro debit brand from MasterCard, for example, according to figures MasterCard released in May. "Lots of opportunities will remain for Visa and MasterCard, as many banks will prefer to stick with brands they know," he says.
