French and German banks to launch Sepa rival to Visa and MasterCard

VIENNA, PARIS & FRANKFURT - A rival to Visa and MasterCard's duopoly of the European debit card market is expected to be launched by a consortium led by French banks Société Générale, BNP Paribas and Deutsche Bank in Germany.

The project, called 'Monnet' and expected to launch in October according to Bloomberg, was described as "promising" by German Bundesbank member Hans Georg Fabritius, speaking at the Euro Banking Association conference in Vienna.

Wiebe Ruttenberg, head of market infrastructure division at the European Central Bank (ECB), said in a speech at the same conference: "We need at least one alternative card scheme in Europe to become a credible challenge to the duopoly."

The anticipated move follows political pressure from ECB to create a European Union (EU)-based alternative to MasterCard's Maestro and Visa's V-Pay within Europe's Single Euro Payments Area (Sepa).

In April, the European Commission punished Visa Europe with an interchange antitrust fine only days after reaching an interchange agreement with MasterCard on the same issue.

EU calls for a home-grown rival to the US MasterCard and Visa duopoly go back to the European Commission's 2007 order for MasterCard to cut cross-border direct debit fees, while Jean-Michel Godeffroy, ECB director-general for payment systems, last year described the status quo as "not enough".

The banks have until now been reluctant to take up the cause, due to industry uncertainty over interchange fees, with the proposed harmonising effects of Sepa within the EU's internal market taking far longer to take effect, requiring the European Commission to consult on new migration deadlines in June this year.