EE&MC study on card-based debit payment systems

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In 2013, the Bundeskartellamt published its critical view of the agreement of the German banking sector on the existing electronic cash card payment system. In particular, the authority communicated its concerns to the leading bank associations participating in the electronic cash agreement. Electronic cash is a system used for non-cash payments at the point of sale by means of the so-called "ec card". It is the leading card payment system on the German market.

Till 2013, merchants have had to pay a standard fee set by the banking associations for each payment transaction. The Bundeskartellamt stated, that this has nothing to do with competition in the market. The aim of the authority was to allow different fees between individual merchants and banks, on the basis of individual negotiations. Moreover, the Bundeskartellamt made the point that it should be possible to use the so-called electronic direct debit system (ELV) in order to keep the direct debit system as a rival product.

EE&MC is currently performing a study in cooperation with the EHI Retail Institute, Cologne, on the decision-making process of card-accepting merchants related to fees for the electronic cash card payment system. The study elaborates the position in which this party would have been but for the infringement. This assessment is sometimes called ‘but-for analysis’. The central question in the study is to determine what is likely to have happened without the infringement. This hypothetical situation demands some form of estimation to construct a reference scenario with which the actual situation can be compared. This reference scenario is referred to as the ‘non-infringement scenario’ or the ‘counterfactual scenario’. 
The methodology EE&MC is using is a survey-based statistical technique that helps determining how merchants’ value different product attributes that make up the electronic cash card payment system. The objective of the EE&MC study is to determine what combination of a limited number of attributes is most influential on respondents’ choice or decision making. A controlled set of potential services is shown to survey respondents and by analysing how they make preferences between these services, the implicit valuation of the individual elements making up the service can be determined. These implicit valuations (utilities or part-worths) are used to create market models. The technique is a trade-off analysis tool used for systematic analysis of decisions.
If you are interested in the methodology and the determination of the hypothetical situation or the “but-for analysis” of the merchants’ fees, please contact us:

T 0211-4544977-0
Dr. Pascal Hildebrand, Senior Consultant
E PHildebrand(at)