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Belgium halts SEPA

Week 15, 2007

Following a decision announced in May 2006, the migration was originally planned to take place before January 2008, to coincide with SEPA introduction.

The suspension of the project comes after reactions from consumers and retailers concerned by the lack of visibility on interchange fees. Febelfin also considers the European legal framework for SEPA is insufficiently ready. Marina De Moerlooze, Febelfin representative said: "European Commissioner Nelly Kroes is still vague on the card payment legal framework".

EuroCommerce, an association representing the retail, wholesale and international trade sectors in Europe, fights for the Commission to review the fee tables of both MasterCard and Visa before SEPA introduction. Many countries equipped with efficient, and cheap, payment systems fear SEPA introduction will make the whole payment system costlier for merchants and consumers.

MasterCard answer to this decision was to reaffirm its will to introduce Maestro in Belgium on January 1st, 2008, this time as a competitor to Bancontact. Already today, 95% of Belgian debit cards have a Maestro application aboard, but it is only used for international transactions. 50% of Belgian merchants accept Maestro cards. MasterCard said it was still working closely with Belgian banks on the future migration.

This announcement may help opponents to SEPA to crystallize their protests and non-SEPA solutions may find a new traction in the near future. Of course, the European Commission cannot remain indifferent to these evolutions, and pressure may force it to regulate interchange fees, something both Visa and MasterCard oppose strongly (cf. Smart Insights #07-04)

Thierry Spanjaard
Chief Editor
Smart Insights