Third European Card Scheme - Will it come in Europe???

Since we are seeing lot of commonality in payments throughout Europe, the banks began pondering the creation of a third payment scheme.

Because past attempts to establish a third European card scheme to compete against Visa, Mastercard, PayPal and others never materialized, the new proposal called Pan European Payment System, or PEPSI, is garnering some attention. The European banks behind PEPSI announced their intentions last month.

The European Central Bank has not weighed in heavily on PEPSI, other than to state it supports the effort of the 20 French and German banks pushing the concept.

With bank support and a common eurozone, it is expected that PEPSI could more easily develop into a payment scheme than something like the ill-fated Merchant Customer Exchange, a merchant-backed effort in the U.S. that came and went over a three-year period. MCX, designed to operate through ACH payments via a mobile wallet, promised to lower costs for merchants but never made it past the pilot phase.

It won't be easy for PEPSI, especially when consumers are content with their chip-and-PIN or contactless cards and mobile payments throughout Europe.

"I think SEPA for cards has not yet been achieved," Aite's van Wezel said. "There is no SEPA cards rulebook because, from a consumer perspective, there is no issue. Cards work the same everywhere in the EU."

Still, merchant acquirers facing increasing competition are longing for ways to deal with inefficiencies and different standards, local exceptions and different card fees in each country.

"There is a growing number of merchants who are using real-time payments at the point of sale to displace cards," Celent's Lodge said. "Whether these are truly to be a third card rail is almost not the point, because the goal of the third scheme was to provide competition to the card duopoly, and these initiatives seem to be addressing that."

For the time being, an initiative like PEPSI is garnering viewpoints from bankers, merchants and consumers ranging from it having "no impact" to becoming "a major disruption" — and all points in between, Lodge (Gareth Lodge, a London-based industry analyst with Celent.added.