Debit card issuers Visa and MasterCard have shrugged off plans by a group of European banks to set up a pan-European debit card scheme to challenge them on cross-border business.

Major European banks, including Société Générale, Deutsche Bank, Dresdner Bank, Commerzbank, Unicredito, ABN Amro and Rabobank, are "believed to be unhappy with the possible emergence of MasterCard's Maestro as the dominant provider of debit card network services in Europe", according to a document from banking consultancy Lafferty Group.

The document, which was published on the Reuters news wire yesterday, goes on to say that the V Pay debit scheme operated by Visa Europe "does not seem to have gained widespread support from European banks".

In response, MasterCard Europe president Javier Perez said the company welcomed more competition in the European debit marketplace, while a statement from Visa Europe said it was "relaxed at the prospect of any new card systems entering the market".

The European debit card market is at a crucial stage, as the European Union last month adopted new rules to create a Single Euro Payments Area (Sepa).

The aim is to have one EU-wide payments system using the same technical standards so that existing banks and new payment institutions can compete to cut costs for the EU's 490 million consumers.

It was expected that MasterCard and Visa would by default become the two dominant pan-European debit schemes.

But the national debit card schemes in Germany, Spain the UK, Portugal and Italy last year formed the Euro Alliance of Payment Systems (EAPS). The card schemes announced their intentions in September that they would co-operate with each other to create a "new alternative for pan-European card payments" that would be compliant with the principles of Sepa. They invited other card schemes to join the initiative.

- (Additional reporting, Reuters)