The EU says the card market lacks competition

European consumers and businesses are paying too much for the privilege of using credit and debit cards, according to the European Commission. In a report, the Commission said the payment card industry in the EU was too fragmented and there was not enough competition in some markets. This report from Theo Leggett.

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Business users can end up paying six times more in one country than they would have to in its neighbour - and smaller companies often pay bigger charges than their larger rivals.

Meanwhile, the fees imposed on retailers are, according to the competition commissioner Neelie Kroes, little more than a tax on sales - which consumers will end up paying.

The report suggests that in too many countries, a small group of banks dominate, facing little or no competition from each other, and preventing rivals getting a foothold in the market.

Key players within the industry now have ten weeks to suggest ways in which the sector can be opened up - or face the possibility of big fines. But a spokesman for the card provider Visa Europe said the industry was already working hard to reduce charges to consumers.

Theo Leggett, BBC News, Brussels

Listen to the words

fire a stern warning
give a strong message

along national lines
according to the rules and systems within individual countries

variations
differences

from country to country
in different countries

rivals
firms which they are competing against

the fees imposed on retailers
the charges which firms selling goods have to pay

dominate
have most of the power

getting a foothold in the market
reaching a position where they can compete

Key players
The most powerful firms

the sector can be opened up
it can be made easier for smaller firms to play a role in the payment card industry

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