Legacy banking in Europe colludes to deny access to financial technology (fintech) companies, bitcoin-related and others, in an effort to retard growth, the European Commission alleges.
Also read: England Can Now Use Left-Over Change to Automatically Buy Bitcoin
Europe’s Envious Problem
Seemingly overnight, fintech companies, and those related, swooped and drained billions from a lucrative lending market previously thought to be institutionally locked down.
Companies such as Amazon.com Inc., PayPal Holdings, Square Inc., better put perhaps, catered to an underserved market: smaller merchants denied by notoriously stuffy banks on the continent. These unconventional lenders found an opening that trusted institutions could not be bothered with.
“We give [smaller merchants] access to capital when others don’t,” Amazon’s Vice President, Peeyush Nahar, pointed out. More agile, less-traditional and less politically-connected companies “get [a smaller merchant’s] business model when maybe others don’t.”
Reuters’ Foo Yun Chee explains, “[European fintech] companies range from those offering mobile payment apps to digital currencies such as bitcoin.”
In no country is that more apparent than in the United Kingdom, where bitcoin and bitcoin-associated businesses have flourished of late – including payment services, exchanges, mining pools, and start-ups. Retailers accepting bitcoin in the UK are everywhere.
This is problematic for the European Union (EU), as Mr. Chee notes, “Britain’s withdrawal from the EU has added urgency to [dealing with such competition] because more than 80 percent of [the European Union’s] fintech market is based in Britain.”
Commission Moves to Jump-Start Competition
EU “antitrust authorities are probing whether the banking industry is preventing rival services from accessing customers’ accounts,” Bloomberg News reports.
The EU’s principal in such matters is the European Commission.
In an online fact sheet, the Commission stated it “has concerns that the companies involved and/or the associations representing them may have engaged in anti-competitive practices in breach of EU antitrust rules.”
As of the time of writing, “the companies” were not named, but Dutch and Polish banking institutions has confirmed being investigated.
Though still only allegations, the Commission goes on, “anti-competitive practices are aimed at excluding non-bank owned providers of financial services by preventing them from gaining access to bank customers’ account data, despite the fact that the respective customers have given their consent to such access” in violation of several statutes.
News.Bitcoin.com searched Dutch Banking Association (NVB) and Polish Banking Association (ZPG) websites for their respective positions on bitcoin. NVB yielded zero public statements, while ZPG’s lone mention is from 2013. Clearly, at least these legacy institutions were/are not ready for what bitcoin and bitcoin-related businesses might mean to their futures.
The Dutch Payments Association published a terse statement, acknowledging being under investigation and how it “will of course fully cooperate with [The Commission] and is confident in the outcome of the investigation.”
Using a familiar line of excuse, ZPG’s Krzysztof Pietraszkiewicz told Bloomberg that giving “access to clients’ credentials to third parties requires diligence and we won’t accept any shortcut solutions that would harm the safety of their deposits. For us security is a priority.”
However it all shakes out, bitcoiners are sure to keep fueling a new day for finance around the world.
What do you think? Is a government agency able to enforce competition, or does it just end up picking winners and losers? Does bitcoin even care? Tell us in the comments below!
Images courtesy of: RTE, Fleur de Coin, Digital Trends.
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