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On October 31, 2024, the College of the Competition Council held a session in the presence of representatives from Bank Al Maghrib to definitively examine the referral concerning practices in the electronic card payment market, in accordance with Article 33 of Law 104-12 on price freedom and competition, as amended and supplemented.
After hearing from representatives of the various parties, discussion, and deliberation in accordance with Article 33 bis of the law, the Council unanimously decided to definitively accept the commitments proposed by the CMI and the banks that are shareholders of the CMI, and make them mandatory.
It should be noted that NAPS SA had referred the Competition Council regarding practices implemented by the CMI in the payment activities sector, POS terminals, and E-COMMERCE.
Following an investigation, a preliminary assessment report was prepared by the Competition Council’s Investigation and Inquiry Services, which highlighted competition concerns in the electronic payment market in Morocco.
After the parties were notified of this report, on September 20, 2024, the CMI and the banks that are shareholders of the CMI proposed structural and behavioral commitments to address the raised competition concerns and enhance the competitive functioning of the relevant market.
These commitments were subject to public consultation to gather the opinions and observations of interested third parties. At the end of the public consultation period, which ended on October 30, 2024, the Competition Council did not receive any objections to these commitments.
Regarding the structural commitments, the CMI commits to:
- Transfer all merchant membership contracts to card systems (affiliation to the Electronic Payment Terminal ‘POS’ and online payment ‘PEL’) to payment institutions or any other bank subsidiary dedicated to acquisition, whether related to these banks or not. Additionally, the CMI commits to transfer contracts related to its online payment gateway activity (E-Commerce Gateway);
- Actively and effectively participate in facilitating and completing this transfer to the new assignees;
- Take all necessary measures to ensure the economic viability, value, and competitiveness of its contracts during the twelve (12) month transitional period from the date of the Council’s decision making the commitments mandatory;
- Refrain from soliciting any new customers or entering into new membership contracts for card systems or contracts related to its online payment gateway activity (E-Commerce Gateway) with merchants (B to C).
However, to adapt to the competitive market context, the CMI may take all necessary measures to defend, preserve, and manage merchant contracts concluded before the date of the aforementioned Council decision, pending their transfer to bank payment institutions or other subsidiaries dedicated to acquisition.
In this regard, the CMI, which will be transformed into a technical processing platform for all payment institutions in the market, undertakes to ensure access to its services under fair, transparent, and non-discriminatory tariff and non-tariff conditions.
As for the CMI’s shareholder banks, they commit to acquiring, for the benefit of their payment institutions or any other dedicated subsidiaries, all merchant contracts related to affiliation with card systems (affiliation to the Electronic Payment Terminal ‘POS’ and online payment ‘PEL’) concluded as of the decision to be made by the Council.
The CMI and its shareholder banks further commit, each in their capacity, to ensure the principles of continuity and service permanence without interruption or decrease by leveraging technical and technological achievements in the field, particularly with regard to various national and international partners, including international schemes[1].
Regarding non-tariff behavioral commitments, the CMI and its shareholder banks commit to implementing a compliance program with competition law and immediately ceasing the practices that were the subject of the aforementioned competition concerns.
The CMI’s shareholder banks also commit to:
- Ensure that their payment institutions or dedicated subsidiaries are legally and economically independent to enable them to enjoy functional and accounting autonomy;
- Not market the offers for affiliation with the Electronic Payment Terminal ‘POS’ or online payment ‘PEL’ of their payment institutions or subsidiaries dedicated to acquisition. However, banks may promote the acquisition activity within their branch networks or through any other means, without prejudice to the bank’s customer’s right to contract with the acquirer of their choice.
As for tariff behavioral commitments, the parties involved commit not to apply an interchange fee per transaction exceeding the ceiling set by regulatory decision of Bank Al-Maghrib No. 244/W/2024 dated September 20, 2024, concerning domestic card interchange fees. It is worth mentioning that interchange corresponds to the part of the acquisition fee paid by the acquirer (the one contracting with the merchant) to the issuing bank (the one that issued the card to the cardholder) for each card payment.
This revision of the interchange allows acquirers to make significant reductions in the pricing for their merchant clients, thereby promoting the development of electronic card payments by reducing the acquisition commission rate.
Furthermore, the CMI and its shareholder banks have committed to submitting to the Competition Council, starting from the date of the Council’s decision making the aforementioned commitments mandatory, and for a period of two (2) years, a documented semi-annual report detailing the implementation of the various structural and behavioral commitments undertaken.
It should be noted that transitional periods and deadlines are provided for in the framework of the progressive implementation of these commitments made mandatory by the Competition Council. Additionally, to ensure the monitoring of the commitments’ implementation, a joint monitoring committee is established between the Competition Council and Bank Al-Maghrib to address technical, economic, and legal aspects related to the implementation of the aforementioned commitments and report back to the Council for information and any necessary decisions.
Issued in Rabat on November 4, 2024
[1] The ‘Scheme’ is a card payment network branded under a mark (for example VISA and MASTERCARD) to facilitate and secure transactions between cardholders and merchants.
