On 19th February 2014, the Italian Competition Authority (ICA) opened an in-depth investigation in order to assess whether the decision of the “Bancomat Consortium” to apply a commission for bills payment services may constitute an infringement of Article 101 TFEU, the prohibition of anticompetitive agreements.
“Consortium Bancomat” is composed of Italian Bank Association, Italian banks, financial consultants, payment institutes and other undertakings authorised by Italian and European Union Laws to operate in the payment services sector.
The “Consortium Bancomat” decided to apply a Euro 0.10 commission to all bills and invoices payment made through a “PagoBancomat” debit card as of 3rd January 2014.
The ICA held that the commission decided by the “Bancomat Consortium” would constitute the consideration for the banks and the other undertakings operating within the “PagoBancomat” service network.
In essence, the mechanism is that the bank enters into an agreement with the issuer of the relevant bill or invoice (“the acquirer”) and pays the commission for each payment made by the debtor (business or consumer), through the “PagoBancomat” card, to the undertaking of the network which issued the relevant card (“the issuer”).
Therefore, the Commission would constitute a cost for the acquirer and a profit for the issuer.
In light of the above, the ICA found that the commission may raise anti-competitive concerns because it represents a minimum fixed cost for the acquirer and thus may impede competition in the bill payment services sector to the detriment of businesses and consumers.
As previously mentioned in our November 2013 newsletter, the ICA’s interest in the banking services sector has been growing.