Corporate treasurers at the Money 20/20 conference recently voiced concerns over a lack of competition in the payment card market, urging competition authorities to look at how key players dominate the space.
Reports in Euromoney on Friday (June 8) said corporate treasurers attending the Money/2020 conference, most of them U.S.-based, expressed frustration at merchant processing fees charged by industry leaders including Mastercard and Visa.
“Who is going to stop accepting Visa and Mastercard?” said Kohl’s Department Stores senior vice-president Troy Carrothers during the event. “Antitrust authorities need to look at the costs they are imposing on merchants.”
Corporate treasurers are reportedly concerned that there are no viable alternatives in the card space to offer more competitive processing fees, the publication said.
“It is important for there to be multiple options during each leg of the chain for both eCommerce and in-store,” said Walmart senior director of global treasury Reed Luhtanen. “When we see incidents like Visa's network going down last week, there is no alternative to revert to.”
Reports also said that corporate treasurers expressed dissatisfaction with a lack of presence of their profession when decisions are made around fees and regulations of interchange fees.
“There is a lot of concern around the rising cost of payments,” said Carrothers. “How do treasurers reconcile the cost of the same transaction being more expensive? There is no scope for the companies to negotiate with the banks on getting better deals under the current set-up. The card providers can add charges arbitrarily and there is no mechanism to stop this.”
Last month research conducted at the annual conference of the Association of Corporate Treasurers found corporate treasurers are more concerned with FinTech disruption, market uncertainties from events like Brexit and regulations like PSD2.
At the time, Graham Taylor, Vodafone’s assistant treasurer, pointed to PSD2 and the rise of APIs that “could mean, possibly, getting rid of interchange fees.”
“That could be massive for us and all corporates,” he said, according to Global Finance reports.