viernes, 29 de noviembre de 2013

European payments market needs ‘level playing field’

If Europe is to enjoy a truly single market it must first tackle the fragmentation in its payments markets.

The single market is considered one of the primary achievements of the European Union, yet half a century after it was conceived it still features significant gaps that are causing fragmentation and creating obstacles to cross-border activity. Nowhere are these barriers more crucial, but less visible to citizens, than in the EU's dynamic and shifting payments market. The dream is for cross-border payments to eventually become as simple as domestic payments within a member state. Looking at this issue are two key reports currently moving through parliament; one looking at card-based transaction fees and another looking at the EU-wide market for electronic payments.

For Portuguese MEP Diogo Feio, who is rapporteur on electronic payments, it is vital to understand the "differences between the various states of the EU" when looking at the market for transactions. "Some are developed and more modern than others," he explained, adding that "For a Portuguese citizen it is usual to do a payment at an ATM or in internet banking. In other countries this is not the same." In addition to the various methods employed in different member states, there are also "different levels of payments and we need to understand these", said Feio. To properly deal with these diverging methods, he urged policymakers to "think of consumers", adding that "first of all we need a more simple and understandable law". He underlined the need for regulations on ePayments to have "clear and easy rules" and for Europe to move in the "direction of a single payments market". "This is a very important step in line with the internal market," he added.

Fellow EPP deputy Pablo Zalba Bidegain, whose report looks at card-based payments, highlighted the need for a "level playing field for all transactions based on payment cards". For him, this could achieved by setting the same multilateral interchange fees (MIFs) across the entire EU. MIFs, which are collectively agreed inter-bank fees, form part of the fees that payment service providers charge to merchants, who in turn pass the costs onto the consumer.

"One of the problems we face" said the Spanish MEP, "is that market entry for pan-European players remains difficult as interchange fees in EU member states vary a lot between one country and another. New entrants have to offer interchange fees at least comparable to those prevailing in each within the whole European Union will create a level playing field."

The European commission's proposal suggests capping MIFs at 0.2 per cent for debit transactions and 0.3 per cent for credit card transactions. This would represent a significant drop in member states such as Poland, where the fees are around 1.6 per cent, but would be over the 0.1 per cent charged in Denmark. Zalba Bidegain said that parliament wants to be sure that these figures are charged at the correct amount and that they "do not negatively affect consumers". However, when looking at the possibility of an outright ban for MIFs, he said, "I firmly believe in the case of credit cards that banks have the right to charge for that payment because there is a risk linked to that. In the case of debit card operations, although it is not so clear, I think it would make sense to charge something." The capped figures of 0.2 per cent and 0.3 per cent have reportedly been accepted by key players in the payments market, Visa, MasterCard and the French domestic scheme Groupement Cartes Bancaires.

A key issue facing both pieces of legislation is the dynamic and changing nature of the payments market. For Zalba Bidegain it was crucial to ensure that the regulation of these fees was made "futureproof ". "We have to make sure that there are no gaps in the regulation that PSPs can take advantage of," he added. Feio also underlined the importance of recognising "new ways of payment" and the need for any new regulations to be able to "understand and regulate" these novel methods. However, he also made it clear that he felt all different methods of payment "should have the same treatment as much as possible". For the Portuguese rapporteur, new problems such as the protection of data have also arisen through the use of these new methods. "Safety and security of data will be a priority," he said, adding that the protection of systems of payment against fraud" will be a key aspect of his report.

Zalba Bidegain was keen to stress that innovation was a crucial issue for him. "We want companies to go on having incentives in investing in innovation," he said, adding that MIFs have a negative effect on this. This understanding of the negative effect of transaction fees was in part inspired by the May 2012 general court decision against MasterCard, which found that MIFs restrict competition by inflating card acceptance costs, while providing no consumer benefits.

Both rapporteurs wanted to ensure that consideration for consumers was made a central pillar of their reports and ensuring an easy and transparent way of making payments across the EU is key to this aim. For Zalba Bidegain, both reports are inextricably linked in helping make the single market a reality. "We are working very closely on this report with Mr Feio. Same line, same direction, same timing," he said. For Feio the aim was simple "We are building what we need to have a single payments market."

About Our Speakers

Pablo Zalba Bidegain

Vice Chair, Economic and Monetary Affairs Committee

European Parliament

Pablo Zalba Bidegain is the Vice Chair of the Economic and Monetary Affairs Committee at the European Parliament. As the Vice Chair, he is the Rapporteur for the Amendment of Regulation(EU) No 99/2013 on the European statistical programme, the Rapporteur for Interchange fees for card based payment transactions and the shadow rapporteur for the European Semester for Economic Policy Coordination AGS 2014. 

Pablo will be giving a keynote presentation on the upcoming 2014 regulatory landscape at 09.15.

jueves, 28 de noviembre de 2013

Working Breakfast: “WTO meeting in Bali: What consequences for SMEs?”

Today, Tuesday the 26th of November, we the SME Europe of the EPP the Working Breakfast on the topic “WTO meeting in Bali” and its consequences for SMEs. Several high level speakers shared their opinions, insights and up to date information.

Dr. Paul Rübig MEP, Member of EP Committee on Industry Research and Energy and Honorary President of SME Europe, emphasized that trade is playing a significant role to overcome the crisis and the importance of the inclusion of members of the parliament in the WTO process as it destroys the information monopoly the governments usually have since the parliamentarians are often from the opposition. More distribution of power leads to better results. He hopes to bring back a “Christmas present” in the form of millions of new jobs from the trade negotiations in Bali.

Ralf Kamphöner, Director of International Trade at Eurocommerce talked about the importance of a strong WTO for SMEs since they profit immensely from trade facilitation that is the main delivery from the meeting in Bali. SMEs are expected to have 15% lower trade costs since especially small enterprises profit from easier rules and lowered bureaucracy. Mr. Kamphöner said that simplification and harmonisation are very important and through the trade facilitation all countries, more and less developed, are going to receive a strong economic boost.

MEP Pablo Zalba Bidegain, Vice Chair of the EP Committee on Economic and Monetary Affairs, believes that the WTO meeting in Bali can improve the unemployment situation especially in the Mediterranean region. In Spain 90% of employment is given by SMEs and, like the previous speakers, he is convinced that they will mostly benefit from an agreement.

Fabian Delcros, chair of Trade and External Affairs Committee AmCham EU, detailed a few practical examples on how the Bali WTO round could influence businesses. E.g. that exporters could ask any government participating about procedure, tariffs, classification before actually shipping the goods and the answering government is legally bound to the response they provide to the exporter.

Mr. Delcros also pointed out that Bali is not the end, but just a further step in a long process with many questions and issues needing to be solved in the future.

Signe Ratso, Director of Trade Strategy and Analysis, Market Access in DG Trade in the European Commission, highlighted the worldwide benefits of a successful agreement: 21 million jobs and one trillion Euros added to the economy. According to Mrs. Ratso the WTO can’t afford a failure since it would severely hurt the credibility of the institution as it exists today. She also stressed the importance of organisations like SME Europe and Eurocommerce for the European Commission to increase pressure at negotiations.

martes, 26 de noviembre de 2013

Trade is 'key tool' for EU growth

Adherence to international trading standards will be a crucial element of improved EU-China relations, explains Pablo Zalba Bidegain

Trade and investment are the key tools in Europe emergence from the current crisis, in that they generate growth and employment, as evidenced by recent data from Spain. The European Union is aware of this and is working hard to build an extensive network of trade and investment agreements.

The two trading powers of China and the EU have been called upon to come together and work towards this goal, which they have clearly demonstrated through the bilateral agreement negotiations they have been conducting between them. Direct Chinese investment in Europe continues to grow and is now in excess of two per cent while the EU's investments in the Asian giant are currently approaching 20 per cent, meaning that this agreement is to play an important role in promoting and strengthening social and economic relations between the two blocs through the establishment of a stable, legally secure framework.

The desire to improve and deepen our social and economic relations must be evident if we are to have the ability to deal with any potential trade issues that may arise. How do we make this desire to improve and deepen our relations a reality? The answer lies in complying with international standards, particularly those set by the World Trade Organisation. The open investigation currently being conducted by China to determine whether imports of European wine are being subjected to dumping has provided them with an opportunity to set a precedent in this regard. The investigation will hopefully be concluded in the very near future in compliance with the said standards, as this situation has resulted in the European commission having to keep in continuous contact both with the European parliament and our wine-growing industry.

Without such agreements, or the will to enter into them, developing our own strong trade relationships in our times will be impossible. We look to China and the European Union to set the example for such development.

Pablo Zalba Bidegain is a vice chair of parliament's economic and monetary affairs committee