Neonomics, an open banking payments and data company, has lodged a formal complaint to the Norwegian Competition Authority to advocate for innovation and fair competition within the Norwegian Payments market. The complaint outlines a series of anti competitive practices by Norwegian banks, domestic and international financial services providers as well as additional actors which operate under ownership and control of the Norwegian banks. Neonomics asserts that these practices defy the principles of Payment Services Directive (EU 2015/2366, “PSD2” and acts in accordance with the provisions of Norwegian Competition Act (§§ 10 and 11).

PSD2: Promoting Competition and Innovation

PSD2, implemented in Norway in 2019, aimed to foster competition and innovation by enabling new entrants to offer payment services. However, Norwegian banks have actively undermined these goals, limiting access to critical payment markets. They have also obstructed the development of alternatives to their proprietary AvtaleGiro product, delivered by Mastercard Merchant Services, a subsidiary of Mastercard, which is deeply ingrained within the banks’ existing operations and core business models. These practices have hindered competition, innovation, and consumer choice.

Core Issues in the Complaint

1. Market Entry Barriers: Norwegian banks have coordinated to block access to direct debit payments, effectively excluding new entrants from competing with the monopoly of the established AvtaleGiro and e-faktura from payment giant Mastercard. This exclusionary behavior stifles innovation and deprives consumers and merchants of potential alternatives.
2. Unfair Terms and Pricing: Banks have applied unreasonable prices and terms for essential services, such as client accounts and delegated strong customer authentication (SCA). These practices create insurmountable barriers for third-party providers attempting to compete with bank-led solutions.
3. Preferential Treatment of Dominant Players: Through their collective dominant position, banks have unfairly favored established providers, such as Vipps, Visa, and Mastercard. The established providers benefit from unfair advantages such as subsidies and preferential terms that are not offered to their competitors, further entrenching their market position.
4. Coordinated Conduct to Suppress Competition: The banks have engaged in coordinated actions through entities like Bits AS to maintain their dominant market position, limit competition, and prevent third-party providers from gaining access to critical payment infrastructure.

These anti-competitive practices hinder the availability of innovative payment solutions, restrict consumer choices, and increase costs for merchants who have no viable alternatives to AvtaleGiro and card payments. This stifles market growth and deprives consumers and businesses of the benefits PSD2 was designed to facilitate.

Christoffer Andvig, Founder and CEO of Neonomics states: “The actions of the Norwegian banks not only undermine the core principles of PSD2 but also stifle competition, innovation, and choice in the payment services market. This behavior harms consumers and businesses alike, while protecting entrenched interests. We urge the competition authorities to act decisively to restore fair competition and ensure compliance with both EU and Norwegian regulations.”

Legal Basis of the Complaint

The complaint identifies violations of the Norwegian Competition Act (§§ 10 and 11), including:

• Coordinated Conduct: Restricting market access and imposing coordinated terms and pricing to exclude competitors.
• Exploitation of Dominance: Unfairly applying different terms to equivalent services, disadvantaging competing providers.

Neonomics calls on the Norwegian Competition Authority to conduct a thorough investigation of these practices thoroughly and take necessary measures to ensure a level playing field. Upholding the principles of PSD2 is crucial for fostering a competitive, innovative and fair payment ecosystem.

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