On October 11, 2022, the ICA closed an Article 102 TFEU investigation into Mastercard Europe SA (“Mastercard”)’s conduct by accepting the commitments offered by Mastercard relating to its double-tap mandate for contactless payments with co-badged payment cards (i.e., cards that can be used on more than one payment network) (the “Decision”),[1] which precluded retailers operating point-of-sale (“POS”) terminals from accepting single-tap payments from co-badged cards.

In its 2021 decision to open the investigation, based upon a complaint filed by Bancomat S.p.A. (“Bancomat”),[2] the ICA reached the preliminary view that Mastercard’s double-tap procedure raised several competition issues:

  • first, the ICA held that Mastercard’s decision to exclude the single-tap procedure for co-badged card payments negatively affected Bancomat, whose cards are 99% co-badged. In contrast, the double-tap mandate indirectly benefitted
  • Mastercard, whose cards represent 85-90% of the single-brand cards in Italy, and therefore could continue to be used by single-tapping them;
  • second, the ICA noted that the double-tap mandate was also aimed at hindering or excluding Bancomat from access to the digital wallets of certain smartphone manufacturers where single-tap mode is considered a key feature to ensure an immediate and uniform payment experience;
  • third, the ICA found that the asymmetry brought about by the double-tap mandate likely affected the competitive dynamics of the market and could undermine, in the long run, the position of Bancomat;
  • lastly, the ICA held that the current regulatory framework did not justify the double-tap mandate. In fact, the single-tap mode is fully aligned with relevant EU regulations since it guarantees the cardholder’s choice of circuit, given that the user can always express his or her preference to the merchant before each payment so that the POS is set up to proceed with the circuit thus chosen.

In light of these considerations, the ICA alleged that the Mastercard double-tap mandate could constitute an abuse of dominant position.

On April 27, 2022, Mastercard offered a set of commitments, including the following ones:

  • to define the technical indications of the double- tap mandate as market “guidelines” (i.e., having therefore no binding effect) and to refrain from imposing penalties or fines in case of non- compliance with these guidelines, so as to leave the market free to decide how to set up POS terminals (either in single-tap or double-tap mode), based solely on competitive dynamics;
  • not to include a review clause in the commitments;[3]
  • to apply to acquirers operating in Italy a 50% discount for six months (i.e., from October 1, 2022, to March 31, 2023) on the “Chip & Contactless Enablement Acquirer Fee.”[4] The ICA agreed that this discount would generate immediate positive effects in terms of increased resources available to acquirers to modernize their payments infrastructure.

The ICA considered these commitments adequate to address the competition concerns raised in its decision to open the investigation and, as a result, put an end to it with no finding of infringement.

[1]      See ICA Decision No. 30334 of October 11, 2022, Case A548, Bancomat/Mandato Mastercard.

[2]      See ICA Decision No. 29928 of December 3, 2021, Case A548, Bancomat/Mandato Mastercard.

[3]      In a previous version of the commitments, Mastercard had envisaged a review clause, which would enable it to propose to the ICA a revision of the commitments in case of changes to market conditions in light of the data published annually by the Innovative Payments Observatory of the Polytechnic University of Milan. However, the said clause was dropped after several operators participating in the market test argued that it would likely undermine the legal certainty of the commitments offered by Mastercard.

[4]      The “Chip & Contactless Enablement Acquirer Fee” is a fee related to POS terminals not yet enabled to the contactless and EMV functionality (EMV stands for Europay, Mastercard and Visa). EMV chips are the small, square computer chips that appear on debit, credit and prepaid cards to help safeguard them against fraud by creating a one-of-a-kind code for each credit transaction.