[IMGCAP(1)]The European Central Bank continues to push for the creation of a third pan-European card network, but it has no plans to subsidize or launch a new scheme, a central bank official said Thursday at the Cards & Payments Europe 2008 conference in Brussels, Belgium. Francisco Tur Hartman, deputy of the bank's payment systems policy division, says the Single Euro Payments Area could harm competition if Europe is left with a "duopoly" of card schemes handling cross-border debit payments. "Will there be any competition with Visa and MasterCard?" asks Hartman. "We hope so. We are happy with Visa and MasterCard, but we hope there [will be] competition." The central bank plans to urge financial institutions and other payment-industry players to launch a new scheme when the central bank issues its sixth progress report on the SEPA rollout later this year, says Hartman. The central bank called for a third card scheme last year in its fifth progress report. The central bank monitors financial institutions' implementation of SEPA, which is designed to tear down national borders for electronic payments. But the central bank does not exercise direct authority over the way institutions meet the SEPA mandates. At least some central bankers believe a Visa/MasterCard hold on cross-border card payments could drive up fees for merchants. "Are we prepared to deliver a card scheme ourselves? At the time being, no. We would like the market to deliver it," Hartman says. Market observers say a European Commission ruling late last year against MasterCard's cross-border interchange rates makes it more difficult for European banks to build a business case for a third scheme. Despite that, some big banks in France and Germany have told European regulators they are considering launching a new card brand, the so-called "Monnet scheme," although they would need more "clarity" on interchange before moving forward. Another group, the Euro Alliance of Payment schemes, centered in Germany, also is weighing prospects. And a Belgium-based startup, European Payment Solutions, says it plans to test a third scheme called "PayFair" by 2009. A large merchant, likely in Belgium, would issue the debit cards and accept the payments for that trial.

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