Assessing Competition and Regulatory Design in the Market for a Domestic Payment Card Scheme

NERA assessed the competitive effects of the market structure and regulatory framework governing a European domestic payment card scheme for a leading international payments company. Our work focused on evaluating how vertical integration between the domestic card scheme and related services affected competition in adjacent markets. We analyzed the economic implications of alternative market structures, assessed the incentives created by the existing cost-based regulatory framework, benchmarked regulatory models in comparable European payment markets, and evaluated policy options to promote more effective competition while preserving the benefits of the domestic payment system.