Home Technology Regulation NZ competition regulator raises concerns over Ingenico’s Paymark acquisition

NZ competition regulator raises concerns over Ingenico’s Paymark acquisition

NZ competition regulator raises concerns over Ingenico’s Paymark acquisition Image courtesy of Stuart Miles at FreeDigitalPhotos.net

New Zealand’s competition regulator The Commerce Commission is keeping its powder dry on whether it will give clearance to the proposed acquisition of payments provider Paymark by France-based company Ingenico.

The Commission says in a Letter of Issue released on Thursday that it is still not satisfied that the proposed acquisition by Ingenico — an electronic payment software and transaction services vendor — would not be likely to substantially lessen competition in the market.

It says it is not convinced the merged entity would not be able to foreclose rival terminal suppliers, harming competition for merchants seeking terminals or those seeking a solution that integrates a terminal and a digital payment service.

Paymark — owned by four of New Zealand’s five major trading banks, ANZ, BNZ, Westpac, and ASB — is the main supplier of switching services in New Zealand, providing digital payment services. It does not have a payment terminals business. Ingenico has a presence in 170 countries, including Australia.

“The main structural change that would arise from the merger would be the vertical integration of Paymark with Ingenico, a major New Zealand supplier of payment terminals,” the Commission says in its Letter of Issue.

According to the Commission, its key concern is whether the merger would give the merged entity the ability and incentive to use its position in the supply of switching services to make it “more difficult or costly for its rivals to compete for the supply of terminals, either at the wholesale or retail level of the market or both.

“This could have the effect of harming competition, both for customers seeking only terminals and those seeking an integrated terminal and digital payment service,” the Commission says.

The Commission has given Ingenico until 25 July to respond to its Letter of Issue. 

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

 

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