Digitalisation

2019 brought with it increased global antitrust scrutiny of digital markets and reflection on whether existing competition law enforcement tools remain fit for purpose. The intersection between technology and payments has proved no exception. Digitalisation of payments is transforming markets (quickly) and with that presenting novel antitrust questions for competition authorities as well as sectoral regulators and central banks.

New market entrants

The primary focus of competition authorities has traditionally focused on incumbent banks, using competition law and policy as a tool to prise open markets for newer players through, for example, open banking initiatives. With the much anticipated arrival of Big Tech players in payments including the likes of Google, Amazon, Facebook and Apple, often referred to as “GAFA”, there is a growing perception that Big Tech may be able to break into payments markets and quickly scale up services (due to network effects and large user bases). 

Reflecting on general concerns around digital markets, authorities will be wary that Big Tech may seek to exploit their positions in their base markets and perceived superior data advantages to the detriment of competitors and ultimately consumers. Competition authorities are tasked with grappling with the interaction between market participants – the incumbents, new fintech and Big Tech – in what are often nascent and rapidly evolving payments markets.