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As part of the review of the referral from the company NAPS SA regarding the practices implemented by the Interbank Monetary Center SA (hereinafter: CMI) in the payment activities sector, POS and E-COMMERCE, the Acting General Rapporteur published, on September 27, 2024, the commitments proposed by the CMI and the nine shareholder banks of the latter, in accordance with the provisions of paragraph 6 of Article 26 of decree No. 2-14-652 issued for the implementation of Law 104-12 on freedom of prices and competition as amended and supplemented.
It should be noted that the proposed commitments include a tariff component related to the CMI and its shareholder banks’ compliance with the ceiling of the interchange[1], now set by Bank Al-Maghrib.
Indeed, in line with international best practices in this area, the Competition Council recommended that Bank Al-Maghrib cap the interchange rate since the terms of its determination by the CMI and its shareholder banks are a competition concern identified in the preliminary assessment report.
Following exchanges between the Competition Council and Bank Al-Maghrib, the latter issued regulatory decision No. 244/W/2024 dated September 20, 2024, regarding domestic monetary interchange fees, setting the ceiling for these fees at 0.65% of the transaction value from October 1st, 2024.
In this context, the CMI and its shareholder banks committed to the Competition Council not to apply an interchange fee per transaction exceeding the aforementioned ceiling.
This revision of the interchange allows acquirers to make significant reductions in the pricing applied to merchants, which will promote the development of electronic card payments. It will also help preserve a reasonable commercial margin for CMI’s competing acquirers, addressing another competition concern identified in the review process.
It is worth noting in this regard that, despite market competition through the separation of acquisition activity from switching in 2015, the interchange rate saw successive increases by the CMI and its shareholders between 2012 and 2019. These increases negatively impacted acquirers’ margins, limiting competition in the market and resulting in the maintenance of CMI’s quasi-monopolistic position. This situation has hindered, among other things, the development of this market, as well as electronic payments in general, as it represents only 1% of payments in Morocco, contrary to national strategies for digitalization and financial inclusion.
The Competition Council will, as part of its market monitoring missions, monitor the impact of capping interchange on the levels of acquisition fees charged by different acquirers and its effect on market competition and consumer welfare.
The Competition Council reminds, as stated in its press release of September 27, 2024, that interested third parties may submit their observations within one month from the date of publication of the aforementioned press release, no later than October 30, 2024.
The Competition Council will hold its session dedicated to the final examination of the file on October 31, 2024. To this end, and in accordance with the aforementioned Article 26, a summons to said session along with the proposed commitment has been sent to the parties in the manner and form provided for by the same article.
[1] As defined in the Competition Council’s press release dated 27/09/2024, interchange refers to the interbank payment commission that the acquiring institution must pay to the issuing bank.
Done in Rabat, October 16, 2024
