IDEAS home Printed from
   My bibliography  Save this book chapter

Promoting Integration of European Retail Payment Systems: Role of Competition, Cooperation and Regulation


  • Kari Kemppainen
  • Sinikka Salo


The present retail payments clearing and settlement infrastructure in both the EU and the euro area is still very fragmented. Therefore, it is understandable that, in recent years, a debate on the sluggishness of the integration of the European retail payment systems has emerged. The present paper aims at contributing to this debate by drawing some policy lessons from the theory of network economics. This is justifiable on the grounds that the retail payment industry inherently has many characteristics in common with other network industries, like telecommunications. In the paper, special emphasis is devoted to the important competition-cooperation nexus in retail payment systems. The main message of the paper is that the fundamental role of payment system regulators is to provide a level playing field for different service providers. Moreover, compatibility and interoperability, e.g. in the form of commonly adopted standards, are key requirements for the payment system efficiency, as they facilitate the contestability of the market (competition in the market). Regarding dynamic efficiency, the regulators also need to ensure adequate incentives for innovation and investment (competition for the market). In addition to discussing policy issues at a general level, the paper analyses developments in the European retail payment systems as well as the roles and aims of different stakeholders in the current process of building the Single Euro Payments Area (SEPA).

Suggested Citation

  • Kari Kemppainen & Sinikka Salo, 2006. "Promoting Integration of European Retail Payment Systems: Role of Competition, Cooperation and Regulation," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
  • Handle: RePEc:erf:erfssc:43-3

    Download full text from publisher

    File URL:
    File Function: Main Text
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. VAN HOVE, Leo, 2007. "Central Banks and Payment Instruments: a Serious Case of Schizophrenia," MPRA Paper 5281, University Library of Munich, Germany.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:erf:erfssc:43-3. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dragana Popovic). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.