Competition in Mobile Payment Services - Presentation by the OECD Competition Division

Competition in Mobile Payment Services OECD Competition Committee 18 June 2025

Maria Pilar Canedo | Senior Competition Expert Beatriz Marques | Competition Expert

Categories of mobile payments Payment method

CLOUD

PROXIMITY POINT OF SALE

QR CODE

NFC

Security infrastructure

Underlying technology

REMOTE SMS

INTERNET

WEBSITE OR APP

Channel type Wallet

Underlying payment instrument

Standalone payment app

Staged Mobile payment provider hold funds

Embedded payment

Pass-through Card networks or bank accounts holds funds

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Representation of a bank-centric retail-level payment rail 8. Payment completed

Merchant receives funds in account; transaction is complete

7. Merchant’s bank

Funds are received by merchant’s bank (acquirer) after settlement

2. Merchant’s bank

Merchant’s bank (acquiring bank) submits transaction

1. Purchase

3. Card network

Card network routes transaction to user’s bank (issuing bank) for authorisation

User chooses mobile payment to make a purchase

6. Foundational Payment Infrastructure Network costs Paid to the card network

Interchange fees Paid to user’s bank

4. User’s bank Payment Stack Layers Front-end: User interface (Steps 1–2) Middle layer: Retail-level payment rails and interbank clearing (Steps 3–5) Back-end wholesale layer: Foundational settlement infrastructure (Step 6)

Final inter-bank settlement of funds

User’s bank (issuing bank) accesses account for funds and authorises or declines the transaction

5. Card network User funds are cleared through card network

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Representation of an independent non-bank-centric retail-level payment rail User mobile device

Authorised Agent

Authorised agent, enabled by the user’s telecom network, deposits this money into the user’s mobile app or wallet

Merchant’s fees Percentage of the transaction amount, subject to caps or minimums

User User gives cash to authorised agent in person

Purchase User can use this money to purchase goods or services through the app or wallet

Merchants (or peers) Authorised agents can accept this payment

User fees Charged tiered fee based on amount spent 4

Characteristics of digital markets affecting competition

Network effects

Economies of scale and scope

Data as a driver of competition

Switching costs for consumers

“Zero prices”

Multisided markets

Vertical integration

Conglomerate/ecosy stem business models

Innovation and nonprice competition

Competition risks

Market tipping

Regulation as a potential barrier

Foreclosure

Raising rival’s costs

Tying

Bundling

Leveraging

MFN clauses

Anti-steering provisions

Interdependencies between providers

Collusion

Steered or co-opted innovation 6

Opportunities for competition, in addition to keen and timely enforcement…

Open banking

Data portability

Interoperability

API standard design

Reciprocal data access

Asymmetric digital market regulations

Alternative retail-level payment rails

National payment switches

Fast payment systems

Considerations for pro-competitive interventions

Context matters Timing is critical Consider effects on innovation Pro-competitive framing to policy is crucial

Thank you!

Maria.Canedo@oecd.org Beatriz.Marques@oecd.org

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