Mastercard and Visa may be challenged by a new European payment system - Business Insider

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ICYMI: It'll be hard for a new European payment system to muscle out card networks, like Mastercard and Visa, that have deep roots in Europe

PEPSI could help banks capture more revenue from payments, especially considering interchange fee regulations have hindered their performances but not card networks'. A new report that the EC's Interchange Fee Regulation , which moved to restrict interchange fees on card transactions approximately five years ago, has reportedly cost issuers an estimated €2.95 billion in annual revenue.

Meanwhile, card networks' fees have been unaffected by the IFR, allowing card networks to raise fees and boost their revenue by €550 million on a yearly basis. PEPSI could enable issuing banks to cut out card network fees and drive revenue through proprietary fees or other tactics. PEPSI may be able to appeal to consumers in the EU due to their existing interest in debit payments, but it may have difficulty pulling cardholders away from entrenched card networks.

Debit payments are already a leading payment method in the EU, which could make PEPSI attractive to consumers. EU consumers report making more in-store and online payments with debit and prepaid cards than with any other payment option, per a report from

 

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