The European Commission has launched an anti-trust investigation into the European banks’ plan for a Europe-wide electronics payment system called the Single Euro Payments Area (SEPA).
The move follows a complaint by internet payment companies like PayPal that the system is unfair.
SEPA is being developed by the European Payments Council, which includes major banks including Barclays, HSBC , Santander and Deutsche Bank.
The aim of SEPA is to allow users to buy goods online anywhere in Europe and pay using their own internet banking service and current accounts.
According to a complaint lodged by Payment Network AG, a Germany online payments provider, SEPA may unfairly lock out payment providers such as PayPal which don’t have links to banks.
The European Commission says it will investigate the matter because excluding providers like PayPal could breach EU rules on restrictive business practices.
In related news, the Commission said it is also looking at a deadline date for the migration to SEPA.
Internal Market and Services Commissioner Charlie McCreevy said: “The SEPA (Single Euro Payments Area) project holds much promise in terms of improved efficiency, dynamism and competitiveness of the European economy.
“Offering both the legacy and the new SEPA products in parallel would prove a costly business for payment providers. In addition, setting clear deadlines for the migration to SEPA would send a strong signal that SEPA is an irreversible process. It would provide certainty and predictability and act as a strong incentive for both industry and users to speed up migration.”