Few details have emerged about plans to create a pan-European debit card network called Monnet, which would compete with Visa Europe and MasterCard Worldwide. The European Central Bank, however, is firmly behind the creation of a scheme to create more network competition in the region.

Monnet initially gained momentum last year with Deutsche Bank AG and BNP Paribas SA. More than 10 countries agreed at a meeting held in Madrid May 5 to extend the project across Europe, according to Deutsche Bank (see story).

Though Visa and MasterCard are essential to the European landscape because they offer pan-European card-payment products, a third brand is essential to keep interchange rates in check, a member of the central bank’s executive board said last week during a speech organized by the Monnet Project.

“Any mispricing of card-payment services would have a major impact on each and every European and on the European economy as a whole,” Gertrude Tumpel-Gugerell said in that speech. “Therefore, sufficient competition for such an important means of payment is absolutely crucial.”

The bank initially made its preference for a third brand known in November when it released a progress report on the Single Euro Payments Area, the European Union’s effort to enable payments across countries’ borders in the euro region. The European market is still very fragmented along national borders, and cross-border card transactions are almost exclusively effected using two international card schemes, according to the report.

The bank stated in the report it expects a European card scheme to emerge that meets the requirements of cardholders, banks and merchants. Whether that system is Monnet remains to be seen.

“Many industry insiders are skeptical that anything will come to fruition and, indeed, as far as I understand, no launch date has been set, and the project has been lacking investment,” Zilvinas Bareisis, a senior banking analyst at Celent LLC, tells PaymentsSource.

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