Last month Europe headed for the polls to elect its representatives to the European Parliament. And while the results would suggest that there is a fundamental distrust or at best, indifference, to all things related to Europe, I feel that there are many more things that unite us Europeans than divide us.
Our habits during summer holidays for example. We love using our cards when we are on vacation. Much more than when we are at home, and we definitely prefer our cards over cash. A survey we carried out last year showed that 91% of us Europeans carry cards when we are on vacation compared to 60% at home.
Of course, I would prefer that all of us would use MasterCard cards while on holiday. But fundamentally, I believe that we all should have a choice of which cards we want to use – while on holiday and at home. And retailers should have a choice of which card brands they want to accept. Yet, ironically, draft EU rules risk creating a competitive advantage for the most expensive players and thereby hampering this choice.
Recent research carried out by Ipsos MORI on our behalf found that most high value retailers in Europe rated Amex fees higher than Visa, MasterCard or Diners but with little difference in satisfaction of the services provided.
Although I personally appreciate the efforts by the Commission to date to treat all players in the same way, a number of loopholes would allow certain card schemes like Amex to be partly excluded from the scope.
The current proposals would distort the payments market and effectively select winners and losers. The losers would not only be other card schemes. Retailers would also pay the price if the most expensive players on the market were able to impose their products as a result of favourable regulatory treatment. Indeed, the majority of retailers surveyed by Ipsos-MORI would only be willing to support the proposed legislation if Amex and Diners Club were included.
The response so far from policy-makers is that regulating these schemes is too complex. But a very simple solution could be enforcing accounting separation of different internal functions (issuing, acquiring, etc.) in the same manner that already exists in other important pieces of EU legislation, such as the telecoms or energy sectors.
Playing directly into the hands of the most expensive players on the market is hardly what EU legislation is intended to achieve. But this could easily be solved so that how we spend during summer holidays remains our choice.