Is the Dominance of Mastercard and Visa under threat?
At present Visa has 57.30% and Mastercard 38.27% of the European card market, Diners Club and Amex have virtually disappeared. A consortium of about 20 major EU banks, including Deutsche Bank and Santander, are set to announce details for a new payments initiative in the very near future. The new Pan European Payment System Initiative (PEPSI), will process card payments in addition to making fund transfers and mobile payments without using Mastercard’s or Visa’s network. It will rely on the EU’s Target Instant Payment Settlement (TIPS) system that enables real-time fund transfers to handle payments. PEPSI reportedly has the support of the European Central Bank (ECB) and the European Commission (EC), and could eventually replace EU countries’ national payment schemes, potentially making it a serious threat to card networks that are involved in the EU’s B2C cross-border trade. Note for African e-shops selling into Europe – this is one to watch. The Newsletter will be carrying information as PEPSI unfolds.
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